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helpmegan · Jan 7, 2009, 12:45 PM

Hi,
I own a home in MI and have had it for sale for almost 2 years this summer. I owe over $400K. My realtor wants me to drop the price $100k. I would be taking about a $125K loss. What about donating the home to a charity... could I write the $434K loss off? I have no idea what to do and cannot de-fault and wreck my credit. I'm bleeding money monthly and do not see a light at the end of the tunnel.

Fr_Chuck · Jan 7, 2009, 12:59 PM

who is going to first pay off the 400 K you owe, since you can not donate a debt to a company.

I mean I know a dozen charity groups that would love a free house, and you can write off the real actual value, obviously that is not 434 since you can't sell it for that. But if you could write off the current appraised valued of homes selling in that area.

But I don't understand what you expect to happen to the 400 debt you owe on the property.

helpmegan · Jan 7, 2009, 01:06 PM

I thought maybe there would be some way I could take a "loan" out to pay off the mortgage... then donate the home... then write the actual donation off over time. The house will appraise fine, it is just that the market is so bad, there aren't any buyers. The buyers available are making absurd offers trying to get a deal for themselves. I'm in a position where I just hold on to it or take a loss. I thought if I had to take a loss, maybe there would be a way to benefit. I can't qualify for any assistance because I make my payments on time... it is a nightmare.

stevetcg · Jan 7, 2009, 02:02 PM

Originally Posted by helpmegan

I thought maybe there would be some way I could take a "loan" out to pay off the mortgage... then donate the home... then write the actual donation off over time. The house will appraise fine, it is just that the market is so bad, there aren't any buyers. The buyers available are making absurd offers trying to get a deal for themselves. I'm in a position where I just hold on to it or take a loss. I thought if I had to take a loss, maybe there would be a way to benefit. I can't qualify for any assistance because I make my payments on time... it is a nightmare.

You can't give away something that you don't own. As for the loan, you already have one... your mortgage. If you pay that off then you can give the house to charity and deduct it.

AtlantaTaxExpert · Jan 12, 2009, 08:08 AM

Megan:

On the tax issue, you CANNOT donate the house because, as SteceCG noted, you do NOT own it.

As for the rest of your circumstance, those are really a LEGAL and REAL ESTATE questions, not a tax question.