TP carried Mortgage then borrower walked.

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  • AZ-Tax
    Senior Member
    • Feb 2008
    • 2604
    #1

    TP carried Mortgage then borrower walked.

    New client (TP) was carrying mortgage (residential house) via land contract then reporting Installment sale income on form 6252 since 2010. In 2014 TP foreclosed on house if that is the correct term due to borrowers walked. Am I correct that needs to be reported on their 2014 tax return? Also, TP currently owns the house but not as a rental.
    Last edited by AZ-Tax; 04-06-2016, 10:39 AM.
    Tags: None
    • Lion
      Senior Member
      • Jun 2005
      • 4698
      #2
      Read about Repossession in TTB. You have a calculation to go through to arrive at your client's new basis in the property after repossession. Start with 14-11 and 6-20. If you have Tax Tools, see if they have a worksheet. You probably need to get into more thorough research, such as CCH's IntelliConnect. I see an Extension.

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        • AZ-Tax
          Senior Member
          • Feb 2008
          • 2604
          #3
          Quit Claim signed by owner 12-30-2014 and.....

          Quit Claim signed by owner on 12-30-2014 to Lender and it was filed with Courthouse on 1-7-2015. So in what tax year does this repossession belong?

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