Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

M.: I received a Notification of Lien Release on my 2nd mtg…

Customer Question
M. Baker: Hello. I...

M. Baker: Hello. I received a Notification of Lien Release on my 2nd mtg which states:" This letter is to inform you that XXX lendedr has decided to cease collection efforts on the loan associated with the above referenced account number, and will release it lien on your property. After the lien release is issued, your ownership interest in the property and your right to occupy the property will no longer be subject to our lien.

Accountant's Assistant: Thanks. Can you give me any more details about your issue?

It goes on to say "if required by law, XXX lender will report this debt forgiveness to the IRS on for 1099 C. Currently I am chapt 13 with another two yrs. My 1st mortgage is current. My second was part of the Chapt 13 but only for what they notified the court of (which was hundreds of dollars). To my knowledge my payments to the BK trustee do not include any amounts beyond what the court received as a claim.

Submitted: 2 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 8 minutes by:
1/24/2016
Tax Professional: Jax Tax, Tax Attorney replied 2 years ago
Jax Tax
Jax Tax, Tax Attorney
Category: Tax
Satisfied Customers: 1,408
Experience: JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
Verified

Hello. I have reviewed your account. It is common place for a mortgage company that is in 2nd or 3rd place to release their lein during bankruptcy if the value of the home is less than any mortgages with priority leins.

Ask Your Own Tax Question
Tax Professional: Jax Tax, Tax Attorney replied 2 years ago

This does a few things. One it helps their balance sheet.. Also, it means they no longer can collect the debt by way of foreclosure. Since you are in bankruptcy, they will lose all ability to then collect the unsecured debt. They may issue a 1099c to you but since it is part of bankruptcy, it is not taxable. Form 982 would be included with your tax return to state such.

Ask Your Own Tax Question
Customer reply replied 2 years ago
I need you to refine/clarify your answer. In my original question I mentioned that they claimed only hundreds not the balance. I currently have 2 more years left to the Chapt 13. Will I have to pays taxes on the amount listed on the 1099-c (I am assuming it will be the mortgage balance).
Tax Professional: Jax Tax, Tax Attorney replied 2 years ago

They only include or as you put it "claim" up to the FMV of the home. Seeing as there are mortgages with priority, it would make sense that on a small amount of the FMV of the home secured that particular mortgage which is why only a couple hundred was "claimed.

Ask Your Own Tax Question
Tax Professional: Jax Tax, Tax Attorney replied 2 years ago

Or it is likely, the mortgage company figured they had no chance ever to collect and simply wrote off the debt for business purposes. More likely that it is tied to bankruptcy.

Ask Your Own Tax Question
Tax Professional: Jax Tax, Tax Attorney replied 2 years ago

The couple hundred that was in the bankruptcy has likely been paid in full by the trustee with previous BK payments which is why you are now getting the release of lein.

Ask Your Own Tax Question
Tax Professional: Jax Tax, Tax Attorney replied 2 years ago

Example. Fmv of home is $100 at time of filing BK. 1st mortgage is $80k, 2nd is $19,500, 3rd is $10k. Only $500 of 3rd mortgage is included in repayment schedule of chapter 13 because the FMV limits it. Once the $500 is paid, the 3rd goes away as does the lein.

Ask Your Own Tax Question
Customer reply replied 2 years ago
The only amount claimed was the few hundred. No previous bk payments were made .Since I am currently in bk - chapter 13 and to your point the trustee did pay the few hundred in full, I am wonderingi f I am on the tax hook for the balance - in excess of $100k
Tax Professional: Jax Tax, Tax Attorney replied 2 years ago

You are not on the hook so long as you make it through the BK to the last payment. If the BK defaults, the amount owed will come back.

Ask Your Own Tax Question
Was this answer helpful?
Ask Wallstreet Esq. Your Own Question
Wallstreet Esq.
Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
586 Satisfied Customers
Experience: 10 years experience

Wallstreet Esq. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,495 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,272 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
Can the IL Dept of Revenue file a lien or come after me for
Can the IL Dept of Revenue file a lien or come after me for taxes that are over 10 yeaRS OLD? … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,213 satisfied customers
Do you have pay taxes on the interest you get off tax liens?
Do you have pay taxes on the interest you get off tax liens? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Re: CA Demand and Collection fees I filed my 2015 tax return
second opinion] Re: CA Demand and Collection feesHello, I filed my 2015 tax return in March of 2018. A refund was due as I overpaid the State of CA for my tax bill in 2015. When I got my refund check … read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
227 satisfied customers
Re: CA Demand and Collection fees I filed my 2015 tax return
Re: CA Demand and Collection feesHello, I filed my 2015 tax return in March of 2018. A refund was due as I overpaid the State of CA for my tax bill in 2015. When I got my refund check I noticed $530 a… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,027 satisfied customers
We owe property back taxes and. Are subject to a lien sale
We owe property back taxes and. Are subject to a lien sale in June. We own our home outright, but I lost my job and had a hard time getting.g a new one. Poor credit, can't qualify ...need advice … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
My return indicates an error at State Taxes & Interest
My return indicates an error at State Taxes & Interest worksheet, indicating I have to fill in " 1.b.2" I can not do that because I haven't lived in any state other than FL during 2017. I don't know h… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
On line 17, Form 1120 ,C Corp Federal Tax return are state
On line 17, Form 1120 ,C Corp Federal Tax return are state corporate income taxes deductible.If I am doing my Federal C Corp returns for 2017 are the state corporate income taxes due but not paid yet … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
I have an IRS tax law question regarding forms need to file
I have an IRS tax law question regarding forms need to file an extension on filing a form 1041. Need a tax professional from California to respond. … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
I want a refund for prepaid filing of state tax return.
I want a refund for prepaid filing of state tax return … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
On the 1040A form how can i deduct state property tax (
on the 1040A form how can i deduct state property tax (Washington State)? … read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
227 satisfied customers
How to get a personal Arizona State Tax lien released that
How to get a personal Arizona State Tax lien released that is no longer collectible? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Business filing chapter 7 bankruptcy, has not filed Tax
Business filing chapter 7 bankruptcy, has not filed Tax Returns as of yet due to filing won't actually occur for another two weeks. What should we do in regards ***** ***** the Tax? We can't apply for… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,027 satisfied customers
In 2017 I filed Chapter 13 bankruptcy. Are there any
In 2017 I filed Chapter 13 bankruptcy. Are there any additional forms I must file with my 1040 return this year?… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Maryland State Taxes: The state of Maryland put a tax lien
Maryland State Taxes: The state of Maryland put a tax lien on my account because I did not go to I r s audit and had moved and the auditor reversed all of my deductions. This was for the year 2008, 20… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Looking for tax law advise, California, I owe State and
I owe State and Federal Taxes for 2015 & 2016 and have worked out a monthly payment plan with the State but Federal is asking for a $6,100 lump sum by 1/28/18 before working out a monthly payment plan. If I cannot come up with the lump sum they will file a Notice of Federal Tax Lien that will be reported to the credit agencies. Is there any way to negotiate this? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a federal tax lien filed 2015 with 2 assessment dates
I have a federal tax lien filed 2015 with 2 assessment dates in 2008 and 2009. you told me the both expire 2018 and 2019 respectively. how do I obtain an early release from the lien? I would like to p… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I have a federal tax lien filed in 2015. The date of
I have a federal tax lien filed in 2015. The date of assessment is 2008 and other is 2009. I have read that each will be zeroed after 10 years and lien satisfied. Will IRS satisfy both in 2018 or wait… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
128 satisfied customers
Interested in information about new tax laws and their
Interested in information about new tax laws and their effect on S Corporations … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x