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Cary H
Cary H asked in Business & FinanceRenting & Real Estate · 6 years ago

My mortgage was successfully modified through the HAMP program.?

The principal on the loan was reduced roughly $20K to be reduced $7K per year for 3 years. Will I have to pay extra taxes? I need to try to calculate to adjust my withholding this year.

Thanks!

Update:

Maybe I didn't word that correctly, is there a way to calculate how much extra I will have to pay in taxes?

3 Answers

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  • chatsplas
    Lv 7
    6 years ago

    If lender issues you a 1099-c yes, it impacts taxes

    1099-c can be issued when lender forgives part of what YOU promised to repay

    Source(s): Tax pro
  • ?
    Lv 7
    6 years ago

    mortgage principle has nothing to do with taxes - if you itemize deductions and you got a lower int rate, then your mortgage interest deduction might be smaller

  • Slickterp
    Lv 7
    6 years ago

    Yes, any forgiven principal is income to you.

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