Uncle Sam Called: He Wants His Foreclosure Cut
Unloading your home still may mean footing the tax bill
By WILLARD SHEPARD
Mon, Sep 6, 2010
Now, on a day to remember the value of American hard work, Lilly and Manny Mora are fighting Bank of America over this home they bought five years ago to use when they get older.
Like thousands of South Florida residents, when the economy took a dive, they could no longer afford it. They’ve gotten three short sale offers, all rejected by the bank.
“They turned all the offers down and now we have to try to find new buyers,” Mora said.
The bank is moving to foreclose, but whether it’s a short sale or foreclosure, the IRS will get involved. The money the bank forgives can be considered income, and you may to pay the taxes.
In the Mora’s worst case scenario, that means about a $50,000-plus tax bill.
“That’s outrageous,” Mora said. “A person already can’t afford the home.”