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Pensacola Discussion Forum » General Discussion » Government refinancing of home loans

Government refinancing of home loans

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NaNook
2seaoat
gulfbeachbandit
no stress
Floridatexan
Slicef18
10 posters

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Slicef18

Slicef18

Government refinancing of homes that owe more on the house than it is worth. Or as they say, "being upside down" on the home loan for the house.
Most people are not aware that the difference between the refinanced amount for the home and the amount remaining on the old loan is considered taxable income. Even though one didn't receive any cash. The monies forgiven from the old home loan is what the IRS considers taxable income.

Floridatexan

Floridatexan

Isn't that just dandy? And meanwhile, the perps walked, but it was the wrong "perp walk".

And, as I finished this post, a new ad appeared at the top of the page advertising adjustable rate mortgages. DON'T GO THERE.

no stress

no stress

Would you rather owe the difference or the tax on the difference? No brainer for sure

Guest


Guest

Slicef18 wrote:Government refinancing of homes that owe more on the house than it is worth. Or as they say, "being upside down" on the home loan for the house.
Most people are not aware that the difference between the refinanced amount for the home and the amount remaining on the old loan is considered taxable income. Even though one didn't receive any cash. The monies forgiven from the old home loan is what the IRS considers taxable income.

They also consider bankruptcies on credit cards as taxable income.

gulfbeachbandit

gulfbeachbandit

[quote="Dreamsglore"]
Slicef18 wrote:Government refinancing of homes that owe more on the house than it is worth. Or as they say, "being upside down" on the home loan for the house.
Most people are not aware that the difference between the refinanced amount for the home and the amount remaining on the old loan is considered taxable income. Even though one didn't receive any cash. The monies forgiven from the old home loan is what the IRS considers taxable income.

They also consider bankruptcies on credit cards as taxable income.[/quote

How would anyone know that unless they went through it?
Anather character flaw for her to lie about.

Guest


Guest

[quote="Ghandi"]
Dreamsglore wrote:
Slicef18 wrote:Government refinancing of homes that owe more on the house than it is worth. Or as they say, "being upside down" on the home loan for the house.
Most people are not aware that the difference between the refinanced amount for the home and the amount remaining on the old loan is considered taxable income. Even though one didn't receive any cash. The monies forgiven from the old home loan is what the IRS considers taxable income.

They also consider bankruptcies on credit cards as taxable income.[/quote

How would anyone know that unless they went through it?
Anather character flaw for her to lie about.

Shows how smart you are. I owned a legal form business years ago and did bankruptcies and divorces.

gulfbeachbandit

gulfbeachbandit

[quote="Dreamsglore"]
Ghandi wrote:
Dreamsglore wrote:
Slicef18 wrote:Government refinancing of homes that owe more on the house than it is worth. Or as they say, "being upside down" on the home loan for the house.
Most people are not aware that the difference between the refinanced amount for the home and the amount remaining on the old loan is considered taxable income. Even though one didn't receive any cash. The monies forgiven from the old home loan is what the IRS considers taxable income.

They also consider bankruptcies on credit cards as taxable income.[/quote

How would anyone know that unless they went through it?
Anather character flaw for her to lie about.


Shows how smart you are. I owned a legal form business years ago and did bankruptcies and divorces.

Was this between being a waitress and being top of your class in cop school? It's ok. Don't worry. We believe you.

And what is a legal form business?

Guest


Guest

[quote="Ghandi"]
Dreamsglore wrote:
Ghandi wrote:
Dreamsglore wrote:
Slicef18 wrote:Government refinancing of homes that owe more on the house than it is worth. Or as they say, "being upside down" on the home loan for the house.
Most people are not aware that the difference between the refinanced amount for the home and the amount remaining on the old loan is considered taxable income. Even though one didn't receive any cash. The monies forgiven from the old home loan is what the IRS considers taxable income.

They also consider bankruptcies on credit cards as taxable income.[/quote

How would anyone know that unless they went through it?
Anather character flaw for her to lie about.


Shows how smart you are. I owned a legal form business years ago and did bankruptcies and divorces.

Was this between being a waitress and being top of your class in cop school? It's ok. Don't worry. We believe you.

And what is a legal form business?

Sure was! I have a lot of talents.Some I haven't even mentioned yet. I was a waitress at Stouffer's Restaurant in NYC when I was 16. Very good tips.

Slicef18

Slicef18

[quote="Ghandi"]
Dreamsglore wrote:
Slicef18 wrote:Government refinancing of homes that owe more on the house than it is worth. Or as they say, "being upside down" on the home loan for the house.
Most people are not aware that the difference between the refinanced amount for the home and the amount remaining on the old loan is considered taxable income. Even though one didn't receive any cash. The monies forgiven from the old home loan is what the IRS considers taxable income.

They also consider bankruptcies on credit cards as taxable income.[/quote

How would anyone know that unless they went through it?
Anather character flaw for her to lie about.

i thought credit card accounts were not discharged in a bankruptcy.

2seaoat



They also consider bankruptcies on credit cards as taxable income.


Absolutely incorrect.....debts discharged in bankruptcy are not taxable.....period. Dreams are you just fooling around to see what people understand, or are you serious?

2seaoat



Shows how smart you are. I owned a legal form business years ago and did bankruptcies and divorces.


You are totally messing with us now....you know better.....all debts discharged in bankruptcy do not result in the cancelled debt being income under irs

Debt Cancellation
If a debt is canceled or forgiven, other than as a gift or bequest, the debtor generally must in-clude the canceled amount in gross income for tax purposes. A debt includes any indebted-ness for which the debtor is liable or that at-taches to property the debtor holds. In the event that the amount forgiven is $600 or more, the debtor should receive a Form 1099-C, Cancel-lation of Debt, from the lender. See Form 1099-C and the separate instructions. The debtor may not have to report the entire amount of canceled debt as income as certain exclu-sions may apply.
Exclusions
Do not include a canceled debt in gross income if:
The cancellation takes place in a bank-ruptcy case under the Bankruptcy Code,
The cancellation takes place when the debtor is insolvent, and the amount exclu-ded is not more than the amount by which the debtor is insolvent,
The canceled debt is qualified farm debt (debt incurred in operating a farm). See Cancellation of Debt in chapter 3 of Publi-cation 225, or
The canceled debt is qualified real prop-erty business indebtedness (certain debt connected with business real property). See Publication 525.Order of exclusions. If the cancellation of debt occurs in a title 11 bankruptcy case, the bankruptcy exclusion takes precedence over the insolvency exclusion. To the extent that the taxpayer is insolvent, the insolvency exclusion takes precedence over qualified farm debt or qualified real property business indebtedne

http://www.irs.gov/pub/irs-pdf/p908.pdf

2seaoat



Would you rather owe the difference or the tax on the difference? No brainer for sure

In Bankruptcy you neither owe the creditor, or the IRS for the amount which has been forgiven.....it really is a no brainer......that is why our founding fathers wanted every American to be able to have a fresh start and not be under the wealthy British monied class who wanted the colony to be a collection of indentured servants.....some of the most meaningful intent of our founding fathers can be seen in their specific inclusion and dictate to Congress to make uniform Bankruptcy laws.

Guest


Guest

Slicef18 wrote:Government refinancing of homes that owe more on the house than it is worth. Or as they say, "being upside down" on the home loan for the house.
Most people are not aware that the difference between the refinanced amount for the home and the amount remaining on the old loan is considered taxable income. Even though one didn't receive any cash. The monies forgiven from the old home loan is what the IRS considers taxable income.



There is no taxable income if you are upside down..you have to have MADE a profit on the refi like my ex did back in 2004. She refinanced the house once we were divorced from the 168k we bought it for to the new "IVAN INFLATED" value of 212k. Made a ton of money and then proceeded to piss it all away on gosh knows what. She didn't stay in the house more than 15 months.

NaNook

NaNook

2seaoat wrote:Would you rather owe the difference or the tax on the difference? No brainer for sure

In Bankruptcy you neither owe the creditor, or the IRS for the amount which has been forgiven.....it really is a no brainer......that is why our founding fathers wanted every American to be able to have a fresh start and not be under the wealthy British monied class who wanted the colony to be a collection of indentured servants.....some of the most meaningful intent of our founding fathers can be seen in their specific inclusion and dictate to Congress to make uniform Bankruptcy laws.

People can thank Joe Biden for the rule. Remember, his sweet mortgage deal? Remember his lobbyist son on K street? What about credit card debt? Thank Joe Biden... it will follow you, everywhere.

Guest


Guest

2seaoat wrote:They also consider bankruptcies on credit cards as taxable income.


Absolutely incorrect.....debts discharged in bankruptcy are not taxable.....period. Dreams are you just fooling around to see what people understand, or are you serious?

Yes, I am serious Seaoat.You need to stop jumping to conclusions as I didn't say all debt was taxable and I certainly didn't say debts discharged in bankruptcies. I said bankruptcies on credit cards. Do you know what it means to go bankrupt on a credit card?

Months after successfully resolving credit card debts, consumers may receive 1099-C "cancellation of debt" tax notices in the mail. Why? The U.S. Internal Revenue Service considers forgiven or canceled debt as income. Creditors and debt collectors who agree to accept at least $600 less than the original balance are required by law to file 1099-C forms with the IRS and to send debtors notices as well. Taxpayers must report that portion of forgiven debt as "income" on their federal income tax returns.

Read more: http://www.creditcards.com/credit-card-news/forgiven-debt-1099C-income-tax-3513.php#ixzz2GOcOua1l
Compare credit cards here - CreditCards.com



Last edited by Dreamsglore on 12/28/2012, 8:59 pm; edited 1 time in total

ZVUGKTUBM

ZVUGKTUBM

My step-daughter and her husband defaulted on their mortgage 4 years ago when they split up. They were so far in debt that we could not have helped them even had we wanted to. Step-daughter now lives in a house we own with her three kids. Their house was finally foreclosed on and sold a few months ago, and they got a 1099 for the difference between the mortgage amount and the re-sale amount. They are still legally married, so I don't know how they will work out their tax bill. I am not paying it for her or them collectively, so we will see what happens.

http://www.best-electric-barbecue-grills.com

2seaoat



They need to go to a lawyer......well very quickly and consider filing a chapter 7 bankruptcy......They are probably screwed at this late date, but a chapter 7 filed in the year that received the 1099, or under one of the IRS exceptions, they could make an argument of insolvency. I will try to post sometime this weekend a tax form which I believe is out there which may allow people who have lost their homes to not be responsible for the 1099 if they show insolvency, or bankruptcy. I am afraid many people are not going to be working saturday or Monday, but depending on what the hit is on taxes and what their tax bracket is.......they should consider a rush BK.....I am almost certain that the insolvency alone exception was removed in January of this year, and my son who is a realtor and does short sales discussed this with me last year. I will try to post something before Saturday AM, but in any case the lender appears to be looking for what is called a deficiency judgment, and depending on what the amount is they need to be talking to a professional Saturday if they can get into someone's office on a holiday weekend.

Guest


Guest

The Chapter 7 bankruptcy will depend on how much disposable income they have. You just can't file a Chapter 7 anymore because you have too much debt anymore. They may have to file a Chapter 13 and make payments.

Guest


Guest

I am going to Jay's Gun Shop tomorrow. The guns will be worth more.

2seaoat



Yes, I am serious Seaoat.You need to stop jumping to conclusions as I didn't say all debt was taxable.


Dreams you are entirely and completely out of your fricking mind. A debtor who files a bankruptcy does not have responsibility for the debt, and the IRS does not collect a dime of taxes for the amount that the creditor did not collect. You really are way too intelligent for this discussion, and if you read the IRS publication and look at the exceptions you will understand the basis for the IRS position. You also must understand that every lender, creditor, and person who forgives a debt has an affirmative duty to send a 1099 for an amount over $600 which was forgiven.....it is not the duty of the person preparing the 1099 to know if the person has filed a bankruptcy, however the person who files a bankruptcy and........this is important for you to understand......IS INSOLVENT has zero tax liability even if a 1099 was sent out........Now if I file for a company I own under Chapter 11 reorganization, my bankruptcy may not involve insolvency, and in fact I may have assets.....which in that case a 1099 could result in a taxable event.......There can be no taxable event where a person files liquidation under a Chapter 7, and is in fact insolvent. You can waste your time trying to argue with me....you can convince me you meant something else.....but the facts are the facts.

Guest


Guest

2seaoat wrote:Yes, I am serious Seaoat.You need to stop jumping to conclusions as I didn't say all debt was taxable.


Dreams you are entirely and completely out of your fricking mind. A debtor who files a bankruptcy does not have responsibility for the debt, and the IRS does not collect a dime of taxes for the amount that the creditor did not collect. You really are way too intelligent for this discussion, and if you read the IRS publication and look at the exceptions you will understand the basis for the IRS position. You also must understand that every lender, creditor, and person who forgives a debt has an affirmative duty to send a 1099 for an amount over $600 which was forgiven.....it is not the duty of the person preparing the 1099 to know if the person has filed a bankruptcy, however the person who files a bankruptcy and........this is important for you to understand......IS INSOLVENT has zero tax liability even if a 1099 was sent out........Now if I file for a company I own under Chapter 11 reorganization, my bankruptcy may not involve insolvency, and in fact I may have assets.....which in that case a 1099 could result in a taxable event.......There can be no taxable event where a person files liquidation under a Chapter 7, and is in fact insolvent. You can waste your time trying to argue with me....you can convince me you meant something else.....but the facts are the facts.

If you read Slicer's post you would see I wasn't talking about filing a bankruptcy. I said " bankruptcies on credit cards". I tried to clarify my post after so you would understand.

2seaoat



The Chapter 7 bankruptcy will depend on how much disposable income they have. You just can't file a Chapter 7 anymore because you have too much debt anymore. They may have to file a Chapter 13 and make payments.

Well here we go chasing our tails again. First, you cannot file a chapter 7 if you do not meet the means test set forth in the Bankruptcy reform act of 2005.......so exactly why are we discussing a chapter 13 when you argue that a person who has filed a chapter 7 liquidation owes taxes on forgiven debt.....this borders on insanity.

However, you are way too intelligent, so I can only assume that you are talking about Z's situation where his son in law is looking for a method not to address the deficiency judgment and the 1099. In that context the professional that they go to will use software which will take the last 6 months of their average wages, and compare the standard for the area of the country you reside based on IRS allowances and zip code. In fact depending on the latest tables a couple could make too much income, and all there debt is consumer debt. However, if the majority of their debt was business the means test is not used. So in fact the means test will probably be applied, but even if the kids fail the means test, the deficiency judgment will be considered a non secured debt and would become part of the plan which the professional will tell you the number of payments between 36-60, and even in the context where they will be repaying some percentage of unsecured debt from 10% to 100%....the balance of that debt not repaid to the lender will be discharged and there will be no IRS obligation as long as the Chapter 13 filer is in fact INSOLVENT.

ZVUGKTUBM

ZVUGKTUBM

2seaoat wrote:They need to go to a lawyer......well very quickly and consider filing a chapter 7 bankruptcy......They are probably screwed at this late date, but a chapter 7 filed in the year that received the 1099, or under one of the IRS exceptions, they could make an argument of insolvency. I will try to post sometime this weekend a tax form which I believe is out there which may allow people who have lost their homes to not be responsible for the 1099 if they show insolvency, or bankruptcy. I am afraid many people are not going to be working saturday or Monday, but depending on what the hit is on taxes and what their tax bracket is.......they should consider a rush BK.....I am almost certain that the insolvency alone exception was removed in January of this year, and my son who is a realtor and does short sales discussed this with me last year. I will try to post something before Saturday AM, but in any case the lender appears to be looking for what is called a deficiency judgment, and depending on what the amount is they need to be talking to a professional Saturday if they can get into someone's office on a holiday weekend.

Thanks for your interest, Seoat, but neither of them have anything to give or to protect from siezure, so I think they will be okay. SIL now lives with his mother, and step-daughter lives in a home we own, where we keep the lights on. There is no blood in either turnip to squeeze, their credit is already in the dumpster, and the IRS won't jail them as they are very small fish in a big ocean. But thanks anyway....

http://www.best-electric-barbecue-grills.com

Guest


Guest

I had to file Ch 7 back in the day because my ex decided to go for the pink Mary Kay Caddy by signing up multiple people on her credit to sell and they never paid her back. I am talking 30k of Mary Kay no shit. Mary Kay worked well for the lady in Marcus Poiint who had a self made business man as a husband, but her advice to my ex wife led us into ruin and eventually divorce. Mary Kay teaches nothing about business but the idea you can get rich quick. I was able to recover through hard work of my own. Since divorcing the ex has went Ch 7 again.

2seaoat



The problem will be when they get a good job, or if they come into some money.....I have seen many a grown man cry because they thought they would not come after them two years ago.....and then found out otherwise.....usually they will give up the chase in five years......but a fresh start is always the best way to go so nothing jumps out of the closet when you least expect it to have a non wage garnishment of a bank account or get your employer notice of a garnishment......the creditor and the deficiency judgment are as you said no big deal.....but the IRS fines and penalties can be a bitch. I told the story where I was entitled to a 18k refund, and they said no Mr. Seaoat.....your depreciation method on certain assets was wrong....you owe us 6k. I said they were out of there fricking minds....went to the regional IRS office thinking I could find somebody who understands depreciation of assets in the business I own......and after speaking to two people with tats on their neck.....who did not even understand what depreciation was......I was on the phone for 6 months arguing with people telling me I owed them money........Finally, some specialist in Upstate NY called me back and said.....yep....you know what the depreciation schedules you used were correct.....we are going send you your original refund of 18, plus 9% interest on that money.....and when I finally got my refund I made a little over 2k interest on their mistake.....hard to get a 9% return on your money these days.....but you want to entirely avoid hassles with the IRS.....they can be incredibly pushy and stupid as a post.......not a good combination.

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