Hefty tax bill may hit those who lost home

San Diegans who have lost their homes through foreclosure or short-sales thought they had emerged from the dark times and could start rebuilding their lives.

Then the state tax man came calling.

With less than six weeks before taxes are due, an estimated 16,000 former homeowners statewide will owe $15 million in extra income taxes this year and $29 million through 2012.
The tax applies to what is called the “cancellation of debt” that occurs when property owners lose their homes through foreclosure or arrange a short-sale in which they sell for less than the mortgage balance. The lender sends them a form itemizing the forgiven debt, and the amount is subject to income tax.

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http://www.signonsandiego.com/news/2010/mar/03/hefty-tax-bill-may-hit-those-who-lost-home/

Thanks for reading!
Christine Van Tuyl
Prudential California Realty
Coronado, CA 92118
http://www.coronadoislandhomes.com