Accounting News

Friday, September 21, 2007
IRS Offers Guidence on Foreclosure

The IRS has created some new tools and information for people who have experienced a home foreclosure. The information helps taxpayers know if they are eligible for any tax relief. However, the IRS suggests that struggling homeowners should consider all their options carefully before going through a foreclosure.

This is because under the tax law, if the debt wiped out through foreclosure exceeds the value of the property, the difference is normally taxable income. But a special rule allows insolvent borrowers to offset that income to the extent their liabilities exceed their assets.

Labels: ,