How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Irwin Law Your Own Question
Irwin Law
Irwin Law, Lawyer
Category: Real Estate Law
Satisfied Customers: 7311
Experience:  Lawyer- Broker 30+years - foreclosure, short sale, liens, title attorney.
Type Your Real Estate Law Question Here...
Irwin Law is online now
A new question is answered every 9 seconds

When a property is signed over to a mortgage company to

Customer Question

when a property is signed over to a mortgage company to satisfy the mortgage.
is the amount of the mortgage considered a sale of the property. and is the difference between the mortgage and the cost of the property considered a taxable gain.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Irwin Law replied 1 year ago.

It could be a taxable capital gain; however, the IRS may call it ordinary income as debt forgiveness. IOW, you have borrowed out the equity and the lender is accepting the property in full satisfaction of the debt. It is not a sale per se and is more likely to be viewed as debt forgiveness. You will have to have that narrow distinction researched by a CPA.

I hope that you will enter a positive rating for my assistance here by clicking on 3, 4, or 5. There is no additional cost to you. Thanks again for using JUST ANSWER.