Losing your Home in Foreclosure
Experienced Tax Attorney in Irvine, California
Tax Problems After Losing a Home in Foreclosure?
You lost your home in foreclosure. You didn't think things could get any worse - until you received a bill from the IRS for alleged gains from the foreclosure. It is devastating to learn that your wages are being garnished and bank accounts levied to recover assets for taxes that you shouldn't have to pay.
Don't Just Pay the Tax Bill. There is Hope.
You don't have to cave in and pay the huge tax bill. The Law Offices of Scott Kauffman has the answer. For experienced tax help, contact attorney Scott Kauffman. I have nearly 30 years of legal experience and over 20 years of experience devoted exclusively to tax law. I know the laws and the techniques for overcoming IRS problems.
I lost My Home in Foreclosure... Why am I Being Taxed?
When the bank or lending institution foreclosed your home, you were issued a 1099 for the amount remaining on your loan. This form was subsequently submitted to the IRS. The IRS viewed the amount on the 1099 as net gain - which is taxed. However, in most circumstances, you will not have to pay this bill if it is handled correctly.
There is a Simple Solution to Your Devastating Tax Problem!
You can avoid the huge tax bill, wage garnishments and bank levies by filing an appropriate tax return. Taxes are only due for net gains (income or profit) from the difference between the basis (usually the original purchase price) and the amount realized. The amount still remaining on your loan after losing your home in foreclosure (the amount on the 1099 form) is often treated as the sale price of the property. Typically, the original purchase price is higher than the amount still owed on the loan. Therefore, there are not any gains to report.
If an appropriate return is filed, you will likely receive a significant refund for the amount of assets garnished or levied from bank accounts or wages.
What if There Are Gains to Report? Do I Have to Pay the Taxes?
Even if there were still net gains to report, you may not have to pay the tax bill. The IRS allows some net gains on property that was your home (in which you owned and occupied for two of the last five years). The following net gains are allowed without tax penalties:
- Individuals: entitled up to $250,000 of net gains
- Married couples filing jointly: entitled to have up to $500,000 of net gains
Therefore, even if there are net gains to report, you may not have to pay anything in taxes. But you must take care of the problem now to avoid tax penalties.
Contact an Experienced Tax Lawyer: Scott Kauffman
If you have lost your house in foreclosure and now face a significant tax bill for net gains, talk to me immediately. Get the advice you need to avoid paying such an atrocious tax bill. Contact me for advice in Orange County or surrounding areas.
Based in Irvine, California, Orange County tax attorney Scott Kauffman provides tax law assistance throughout California, including Orange County, the Inland Empire, San Bernardino County, and Riverside County including the cities of Newport Beach, Laguna Beach, San Juan Capistrano, San Clemente, Mission Viejo, Laguna Niguel, Laguna Hills, Dana Point, Huntington Beach, Long Beach, Costa Mesa, Anaheim and Santa Ana. The firm also provides advice and representation to out-of-state clients with tax problems in California.
