2nd mortgage charge off tax ramifications?

Question

I have a 2nd mortgage that may be charged off--What are the tax ramifications? I know it can be reported to the IRS as income--but we are also filing a Chapter 13 bankruptcy--so we will be paying the mortgage through the court, so itwill still be paid. Is it only reported if we didn't pay the mortgage? Or is itreported regardless?

What else do I need to know?

Answer 1

I would go talk to:

1. A seasoned asset protection attorney before you do anything.

2. Then go see several BK attorneys with 15-20+ years experience in this field.

My take (I am not an attorney).

Why would you file CH 13 over CH 7?

Income too high? Bankruptcy will fix that problem.

How is the 2nd mortgage being charged off and not the first. Don't you make a single payment? Or do you pay each mortgage separately?

http://en.allexperts.com/q/Tax-Law-Quest...

Answer 2

the bankruptcy will have no effect on your tax obligation. the charge off will be fully taxable if the mortgage company forgives the amount. see a tax adviser