Comments on: Fix the Tax Code Friday: Foreclosures http://www.taxgirl.com/fix-the-tax-code-friday-foreclosures/ Paying taxes is painful... but reading about them shouldn't be. Sat, 21 Nov 2009 12:33:00 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: Kelly http://www.taxgirl.com/fix-the-tax-code-friday-foreclosures/comment-page-1/#comment-3453 Kelly Tue, 16 Oct 2007 19:51:37 +0000 http://www.taxgirl.com/fix-the-tax-code-friday-foreclosures/#comment-3453 ATG - Exactly. I think that's what's getting lost here. Deductions must have corresponding income. The lenders are definitely taking these deductions for "bad debt" so there should be corresponding income. ATG -
Exactly. I think that’s what’s getting lost here. Deductions must have corresponding income. The lenders are definitely taking these deductions for “bad debt” so there should be corresponding income.

]]> By: Another Tax Geek http://www.taxgirl.com/fix-the-tax-code-friday-foreclosures/comment-page-1/#comment-3454 Another Tax Geek Fri, 12 Oct 2007 16:59:56 +0000 http://www.taxgirl.com/fix-the-tax-code-friday-foreclosures/#comment-3454 No, it's not fair. The COD income received by borrowers is harsh, but not inappropriate, and there is a symmetry in the bad debt deduction taken by the irresponsible lender and the COD income reported by the irresponsible borrower. While the COD income is certainly harsh, the gov't approach is worse IMO, in that its reducing the penalty for a poor decision. Making others (vacation home owners) pay for it is even more egregious. I don't own a vacation home, and it looks like owning one may become significantly less attractive. No, it’s not fair. The COD income received by borrowers is harsh, but not inappropriate, and there is a symmetry in the bad debt deduction taken by the irresponsible lender and the COD income reported by the irresponsible borrower.

While the COD income is certainly harsh, the gov’t approach is worse IMO, in that its reducing the penalty for a poor decision. Making others (vacation home owners) pay for it is even more egregious. I don’t own a vacation home, and it looks like owning one may become significantly less attractive.

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