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- Sep 25, 2007
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- 201
Although this article was in yesterday`s edition of the Financial Post, it originated in The New York Times (with the title, "Lose Homes, Pay More Tax") where I found the link. Some excerpts:
Some of the biggest losers in the real estate slump are not purchasers of mansions they could not afford. They are buyers of second homes — or third ones, for that matter — who are sitting on a tax time bomb.
Like many others, the Garcias borrowed more than their homes are now worth. The difference between the amount they borrowed and the rental home`s sale price in foreclosure will ultimately be considered taxable income as forgiven debt.
J. Scott Bovitz, a bankruptcy lawyer in Los Angeles, says the problem is widespread. "I`ve seen people not just buying properties to live in, they`re buying properties to become mini-Donald Trumps."
The boom in real estate in recent years prompted a great many people — though no one seems to know exactly how many — to jump into the market with additional real estate. Some did so a few times, buying multiple properties with the hope of selling them for a quick profit. Several bankruptcy lawyers, who say they are busier than ever, compare the real estate frenzy of recent years to the California gold rush of the 1850s.
http://www.nytimes.com/2008/05/30/business...amp;oref=slogin
Keith
Some of the biggest losers in the real estate slump are not purchasers of mansions they could not afford. They are buyers of second homes — or third ones, for that matter — who are sitting on a tax time bomb.
Like many others, the Garcias borrowed more than their homes are now worth. The difference between the amount they borrowed and the rental home`s sale price in foreclosure will ultimately be considered taxable income as forgiven debt.
J. Scott Bovitz, a bankruptcy lawyer in Los Angeles, says the problem is widespread. "I`ve seen people not just buying properties to live in, they`re buying properties to become mini-Donald Trumps."
The boom in real estate in recent years prompted a great many people — though no one seems to know exactly how many — to jump into the market with additional real estate. Some did so a few times, buying multiple properties with the hope of selling them for a quick profit. Several bankruptcy lawyers, who say they are busier than ever, compare the real estate frenzy of recent years to the California gold rush of the 1850s.
http://www.nytimes.com/2008/05/30/business...amp;oref=slogin
Keith
