Tax Deed Sales http://www.taxdeedsalesonline.com Tue, 28 Dec 2010 19:01:34 +0000 en hourly 1 http://wordpress.org/?v=3.0.3 How will a Deed In Lieu vs. a foreclosure affect my taxes in CA? http://www.taxdeedsalesonline.com/how-will-a-deed-in-lieu-vs-a-foreclosure-affect-my-taxes-in-ca/ http://www.taxdeedsalesonline.com/how-will-a-deed-in-lieu-vs-a-foreclosure-affect-my-taxes-in-ca/#comments Tue, 28 Dec 2010 19:01:34 +0000 http://www.taxdeedsalesonline.com/how-will-a-deed-in-lieu-vs-a-foreclosure-affect-my-taxes-in-ca/ Question by EriCA: How will a Deed In Lieu vs. a foreclosure affect my taxes in CA?
I have already tried a short sale (no luck), and I am now trying to get approved for a Deed in Lieu. I am in default of making payments for 4 months already.

My question is, How will a Deed in Lieu affect me tax wise in California, versus going into foreclosure? Should I even try the Deed in Lieu, or should I just go into foreclosure?

Best answer:

Answer by rusty_266
You will have to pay taxes on the portion of the loan that is forgiven either way. Bankruptcy is the only way to get around that. The deed in lieu greatly benefits the lender, saving them the time and cost of a formal foreclosure. So unless you have negotiated some type of benefit for yourself, such as the bank not coming after you for any additional money due or not reporting your deficiency to the credit bureau, then I’m not sure why you would voluntarily sign the house over.

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