Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.

Trending News

Promoted
Jay S
Lv 6
Jay S asked in Business & FinanceTaxesUnited States · 8 years ago

Non-HAMP loan modification tax liability?

I've been offered a Non-HAMP loan modification that includes principal reduction. HAMP mods are apparently free of taxes to an extent, but what about Non-HAMP? If I can't afford the tax on the entire debt reduction this year, can I pay the tax liability over a few years beyond the tax year of the 1099-C I will probably get?

Update:

It's the original 1st mortgage to purchase the home.

2 Answers

Relevance
  • Anonymous
    8 years ago
    Favorite Answer

    Is this the original loan? The one(s) used to buy, build or improve the home? If yes, you get in a weird situation where it's not income now, but will be when you sell at a gain.

    If it's a refi or heloc and you spent the money on, say, credit cards, it's taxable income unless you can prove you are insolvent.

  • Ryan M
    Lv 7
    8 years ago

    You would have to set-up a payment plan with the IRS and pay interest.

Still have questions? Get your answers by asking now.