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Article Date:
November 2010


Word Count:
665

 

 

Bank Foreclosure Auction


Question

 

I paid $480,000 for our home. It’s now worth $200,000, and I owe $400,000 on the original nonrecourse mortgage. The bank has already foreclosed and sold the house at auction for $200,000. What is our tax situation? (T.S., Brentwood, Calif.)

 

Answer

 

You don’t have a tax problem, because your foreclosure and discharge of indebtedness occurs after 20061 and before 2013.2

 

In a foreclosure, there are two steps to finding the tax situation:

 

1.

Calculating your gain or loss

2.

Calculating your forgiveness of ... Log in to view full article.

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