Rental property (Arizona), used to live in over 12 + months – Reprocussions short sale?

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Property in Arizona that I bought in July 2006 and served for 12 months before it is on the east coast in July 2007. I’ve never been late or missed a payment on my mortgage. I am now a house on the East Coast where I live and have been renting the house in Arizona for 3 years. My head is $ 160K in the House and Arizona out of pocket $ 1,000 + a month at the end of the mortgage, hoa, taxes, etc. I currently have a list of properties is not an agent in an attempt to short sale, but with so many homes on the market, it is not always popular. My question is, if I am able to complete a short sale, I am responsible for paying taxes on the amount of breaks mortgage company, I’m going to have the mortgage company come after me because of the difference because it is a rental building on. Please note that the loan nor the original loan from which we lived there, so it is not a “second property” or “investment property” tax lady “For Darlehen.Um assure you that I’m on the same page and understanding that you bought for $ 270,000 richtig.Ich 07/2006.Ich lived for 12 months and built in 07/2007 a tenancy and the JVM (not counting the 35K $ depreciation would be), then $ 235,000. fell from 07/2007 to date about my JVM. $ 100,000 for a total write-downs at a rental of $ 135K.Wenn I understand you correctly and I am short selling $ 100K, my mortgage company to a loss of $ 170,000 in total, and when I mean $ 135K minus depreciation during a car that leaves me with $ 35,000. Are you saying that I report $ 35,000 as income on my taxes? I think that’s what you’re trying to say. Look forward to your comments and I thank Ihnen.PS Do you know if the mortgage company may come after me the difference or do I qualify under the law of Arizona Anti-Deficency?

1 Comment
  1. Reply
    the tax lady
    May 3, 2011 at 8:44 am

    Hire a competent tax professional to run a mock tax return for you.

    Can you document the FMV of the house when you converted it to a rental? Any losses that occurred while it was your personal residence are NOT deductible.

    When you short sell (or foreclose), you will have a sale to be reported on form 4797. You can claim any losses that occurred after it was rental.

    The 1099-C for cancelled debt will be income on the schedule E and will cancel out the loss on the 4797 (for all but the depreciation you have previously claimed).

    While you can use form 982, it can only be used if you are insolvent or in bankruptcy. This would save you the gain from the depreciation (the first thing the 982 does is absorb the NOL).

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