Archive for the ‘bank owned home’ Category

Do I Really Need Legal And Tax Advice For A Short Sale Or Foreclosure

Saturday, February 11th, 2012

We hosted a and foreclosure panel discussion yesterday. The panel members included Scott Drucker, a short sale/real estate solicitor from Mack, Drucker and Watson, Eric Viavattene, a wickedly smart CPA from Dobbins Money and Gerry Russell, the handling broker with Realty Company executives Phoenix. Once more we were reminded how significant it is to find BOTH legal and tax advice when thinking about a short sale or foreclosure in Phoenix, AZ. Yes, we probably did the bold face thing. We actually do mean this.

There is much confusion about the legal and tax implications of either a short sale or foreclosure. We’ve taken well over 100 hours of continuing education and speciality seminars covering short sales/foreclosure and each time we leave more informed, yet daunted by the complexities concerned. The main area of confusion is the difference between the legal and tax consequences. It is just like night and day.

Just so you know, we are not going to try and explain the variances between the legal side and tax/IRS during a short sale or foreclosure in this article.. There are just too many variables to cover, and we're not attorneys or tax pros. That said , below are a few things both Eric and Scott discussed during the debate we want to pass on.

Short sales frequently offer more protection to the householder than a foreclosure. This is not a definite though and may be explored by consulting both a tax and legal pro.

The Arizona Anti-Deficiency laws don't always protect a home owner from IRS liabilities in a short sale or foreclosure. The anti-deficiency laws offer legal protection in categorical circumstances, yet may not guard against an IRS obligation.

Insolvency is an IRS protection mechanism some may benefit using with a short sale or foreclosure. But you've got to make a really strong and correct paper trail.

If going into foreclosure, many will benefit by having a rating performed before the trustee sale.

If you're considering bankruptcy together with a foreclosure or short sale, make sure and work with a great insolvency solicitor and tax professional before you do anything. If you do things in the wrong order you might find yourself in jeopardy.

If you've done a short sale and received a 1099 from the lender, don’t ignore it. Seek a qualified tax pro to insure it is reported properly to the IRS.

This is simply a short list of many things that came up in the 1.5 hour panel debate. The bottom line reminder to us as Realtors is simple: Strongly counsel our customers to seek professional counsel. This has long been our policy, yet it is great to be reminded.

You could be wondering how much consultation cost. We can’t speak for all attorneys and tax professionals, yet Scott and Eric shared their fees with us.

Mack, Drucker and Watson will sit with you, go over your current position and offer options for only $250.00. The folds at Dobbins Finance will check your circumstances and offer advice for $195.00. Therefore, for less than $500.00 you may be educated BEFORE deciding. To us that is inexpensive insurance.

AN IMPORTANT NOTE: Quality guidance is the results of good information. Ensure you gather any and all loan documents and financial statements before meeting with your legal and tax counsel. We’ve read about folks who neglected to mention they had refinanced their home or taken money out in a home equity line and found themselves in appalling straights later on.

CONCLUSIONS ABOUT Looking for LEGAL AND TAX Guidance Before A SHORT SALE OR FORECLOUSRE:

There is simply no way most house owners can continue with a short sale or foreclosure on there own. The IRS tax code is miles long and the legal side of the equation is a moving target based mostly on new rulings and changing laws. Your long term safely and happiness is worth a few hundred $.

Phoenix Consultant specializes in in the Phoenix AZ metro areas. Reasons for short sales include minimum credit damage, capability to acquire a future mortgage, employment factors, avoiding foreclosure and low tax liability. We will help you with your Short Sale today!

Phoenix Short Sales Specialist
2 N Central Ave 720
Phoenix, AZ 85004
(480) 648-4929

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