From the East Valley Tribune;
Former homeowners who did a cash-out refinance on their home when values skyrocketed are particularly vulnerable to higher tax liabilities in the aftermath of a short-sale, Underwood said.
“For example, if somebody bought a house for $200,000 and then … when values shot up, they took $100,000 back out so now they owe $300,000, my understanding of the debt-forgiveness act is it’s based on the amount used or the amount borrowed when they purchased the home,” he said. “The original mortgage that they took out was only $200,000 when they bought the house, so they could be liable to pay taxes on that $100,000 as regular income.”
John Wake
Born in Phoenix, trained as an economist and now a licensed Realtor, John uses hard data from the real estate market to help his clients -- buyers and sellers of residential real estate -- uncover their best choices for finding the right home or finding a buyer for their current home.
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