[GGAIL]

DO I have to pay capital gain to the IRS if I rented my house for 1 yr and now my house if being foreclosed.


Thanks in advance for your help,
Gail

>Moved from Forum Help<

[ebaines]

If you have owned the home for at least two years, and lived in it as your main home for at least 2 years out of the previous 5, then you can exclude up to $250K in gain from the sale of the home. If you don't meet these requirements then you report the sale of the home as a capital gain. If you have ever deducted any depreciation on the house, then your cost basis is reduced by that amount.

For further info see:
Publication 523 (2007), Selling Your Home

[MukatA]

If you have capital gain from foreclosure, you must report it. Also any canceled debt is considered income. You should get more information if you have capital gain that you can not exclude.

You may exclude gain of up to $250K from the sale of your home. Read: Your U.S. Tax Return: Profit From the Sale of Your Home

[GGAIL]

Thanks for the info. Actually, I am not selling my house and I can't sell it because it's already way below the market value since I purchase it almost 3 yrs ago. My question is, do I have to pay anything to the IRS after it was foreclosed?


THanks again!
Gail

[GGAIL]

:D

Thanks for the info. Actually, I am not selling my house and I can't sell it because it's already way below the market value since I purchase it almost 3 yrs ago. My question is, do I have to pay anything to the IRS after it was foreclosed?


THanks again!
Gail

[GGAIL]

:D

If you have capital gain from foreclosure, you must report it. Also any canceled debt is considered income. You should get more information if you have capital gain that you can not exclude.

You may exclude gain of up to $250K from the sale of your home. Read: Your U.S. Tax Return: Profit From the Sale of Your Home

[MukatA]

If your home was foreclosed on or repossessed, you have a sale.

You figure the gain or loss from the sale in generally the same way as gain or loss from any sale. But the selling price of your home used to figure the amount of your gain or loss depends, in part, on whether you were personally liable for repaying the debt secured by the home.

See Publication 523 for more information.

Form 1099-A and Form 1099-C. Generally, you will receive Form 1099-A, Acquisition or Abandonment of Secured Property, from your lender. This form will have the information you need to determine the amount of your gain or loss and any ordinary income from cancellation of debt. If your debt is canceled, you may receive Form 1099-C, Cancellation of Debt.
Questions and Answers on Home Foreclosure and Debt Cancellation