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Damien Bosco
Damien Bosco, Attorney
Category: Real Estate Law
Satisfied Customers: 2582
Experience:  Helping you with your legal questions.
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I am thinking about a deed in lieu of forcloser. Northern

Customer Question

I am thinking about a deed in lieu of forcloser.
JA: Where is the property located?
Customer: Northern WI
JA: Has any paperwork been filed?
Customer: no
JA: Anything else you want the lawyer to know before I connect you?
Customer: I' looking for how it will affect my income taxes
Submitted: 8 months ago.
Category: Real Estate Law
Expert:  Damien Bosco replied 8 months ago.

Hello. My name is***** am an attorney. I will review your question. I may need to clarify facts first. I will answer & we can discuss issues.

Expert:  Damien Bosco replied 8 months ago.

A deed in lieu may generate unwelcome taxable income based on the amount of your "forgiven debt. The IRS treats forgiven debt as taxable income, subject to regular income tax. When debt is forgiven or canceled by a lender, the amount that has been forgiven is considered income for tax purposes, whether the debt is a mortgage or another kind of credit. That means you must report the amount of the canceled (or forgiven) loan on your tax return and pay taxes on it, just like any other kind of income. We can discuss more if you would like to do so.