The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: loss on defaulted loan?||Date: 3/12/1999 10:26 PM|
|Author: TMFTaxes||Number: 12062 of 121175|
[[I "carriedback" a 2nd mortgage (installment sale) on the sale of a rental property
a few years back. I received some cash at the time of sale and the new owners
assumed the existing 1st mortgage. The 2nd mortgage was structured with
interest accruing for 3 yrs, with payments beginning in the 4th year.
Unfortunately, the owners filed bankruptcy. The 1st mortgage holder received
the property in court and the judge discharged the 2nd mortgage due to me.
Can I claim a loss for this and if so, how?]]
Possibly, yes. But you really need some professional assistance with respect to this transaction, since it can get very complicated. Heck, it is even possible, depending upon how you completed the original installment sale in the year of sale, you might even have a GAIN on the "forclosure". So you've got to make sure that you are on solid ground.
At a MINIMUM, you'll want to read IRS Publication 544 at the IRS web site.
Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. It'll help you with your 1998 taxes, and it's never to early to start planning for your 1999 taxes. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
|Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|