Posted by JohnBoy on May 02, 2001 at 07:17:36:
As far as I know it would. This is something that should be discussed with a BK attorney. Some taxes have to be two years old before being able to have them discharged in a BK. I’m not sure if this case would apply under the two years or not.
Hard Cash & Short Sales - Posted by Nathan
Posted by Nathan on May 01, 2001 at 17:17:55:
I would like someone to explain what happens when a home in foreclosure is purchased with funds from a hard cash loan. The amount is usually less than the amount owned on the property. What is the procedure? What permission must be obtained from the bank for a sale of this type to proceed? Does the homeowner have to notify the lender that he is selling the property for less than what is owned? Who pays the difference between what is owned and the actual sale price of the property?
Will the homeowner be able to receive the total amount of a short sale or is part of it left on “the table” for the lender? Just trying to understand how this method of buying a property is done. Thanks!!
Re: Hard Cash & Short Sales - Posted by JohnBoy
Posted by JohnBoy on May 01, 2001 at 21:11:33:
The seller agrees and the lender agrees to a short sale. The buyer’s money would all go to the lender. The seller would get nothing. The seller would have to pay taxes on the difference that the lender lost from doing the short sale.
Home is worth $100k. Balance of mortgage is $100k. Both, the seller and the lender agrees to a short sale for $80k. The lender would get the $80k and the seller would get $0. The lender would issue the seller a 1099 for the $20k the lender lost and the seller would have to pay income tax on that amount. The seller could avoid the tax through a BK.
Re: Hard Cash & Short Sales - Posted by Ben (OH)
Posted by Ben (OH) on May 02, 2001 at 06:41:01:
If the BK is filed after the short sale does that avoid the tax?