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Deed In Lieu Of Foreclosure Tax Consequences


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Deed In Lieu Of Foreclosure Tax Consequences. In this article, we discuss the tax consequences of real property foreclosures, or “deed in lieu of foreclosure”. Deed in lieu of foreclosure is a term that is often used when homeowners are unable to continue making mortgage payments.

What is a Deed in Lieu of Foreclosure?
What is a Deed in Lieu of Foreclosure? from atgtitle.com

Deed in lieu of foreclosure is a term that is often used when homeowners are unable to continue making mortgage payments. A deed in lieu of foreclosure is a voluntary process where a property owner transfers their property title to the lender to avoid a formal. In this article, we discuss the tax consequences of real property foreclosures, or “deed in lieu of foreclosure”.

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What is a Deed in Lieu of Foreclosure?

A deed in lieu is a mutual agreement between the borrower and the lender and is a method that can be used to avoid a having foreclosure on record. Real property foreclosures can produce various tax consequences depending on the type of debt (recourse or nonrecourse), the taxpayer’s adjusted basis in the property, and the taxpayer’s financial condition at the time of the foreclosure. If your lender agrees to a short sale or to accept a deed in lieu of foreclosure, you might owe federal income tax on any forgiven. A deed in lieu is a mutual agreement between the borrower and the lender and is a method that can be used to avoid a having foreclosure on record.

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