Comments on: Fix the Tax Code Friday: Mortgage Debt Cancellation

By: Jules

Jules — Sun, 01 Feb 2009 15:21:12 +0000

Whoa! Lot of self-satisfied posters on this thread. Can you spell “schadenfreude”?

By: Fix the Tax Code Friday: Mortgage Debt Cancellation | taxgirl

Fix the Tax Code Friday: Mortgage Debt Cancellation | taxgirl — Fri, 31 Oct 2008 22:12:03 +0000

[...] Read the rest of this great post here [...]

By: Kelly

Kelly — Sat, 18 Oct 2008 19:06:13 +0000

Robert -
Your comment got caught in my spam filter (ironic what it won’t catch). Thanks for the link!

By: Chris

Chris — Mon, 13 Oct 2008 14:58:46 +0000

Government interference always benefits bad decision making.

Welfare, medicaid, and the mortgage bailout all benefit those that made poor decisions in life. Wall Street made all kinds of bad decisions and look how the government is bailing them out.

The key is to make the same bad decisions as many others. If the government sees too many people suffering from the same bad decisions, they will step in. If you make a poor decision at a bad time (like when there is no growing crisis) you will most certainly be left out. I.E. if you bought a house in a flood plain and a flood knocked out your house, w/ no insurance you are SOL. If thousands of people did the same thing at the same time, the government will step in and bail everybody out.

If you made all good decisions, good for you, you get no direct benefit, only tax bills.

By: Robert D Flach

Robert D Flach — Mon, 13 Oct 2008 10:34:16 +0000

KPE-

I provided my 2 cents worth on this topic in my post WHAT’S WRONG WITH THIS PICTURE at http://wanderingtaxpro.blogspot.com/2008/10/whats-wrong-with-this-picture.html.

TWTP

By: Richard K. Dirham

Richard K. Dirham — Sun, 12 Oct 2008 12:17:43 +0000

SURE!! Let people who borrowed more than they could afford off the hook!! Continue to punish those of us who have made our paymants over the years and not lived from payday to payday. We’ve had to pay tax on the interest from our savings for years. Why should those who did not save a thing, spent all they earned and all they could borrow have to face reality?? Yup, Congress should lend a helping hand to those folks. While there at it, Congress should give itself a raise and praise itself for saving the ecomomy. An Ohio Saver!!

By: Another Tax Geek, CPA

Another Tax Geek, CPA — Sun, 12 Oct 2008 01:15:22 +0000

David,

I was going to respond to your comments, but there are too many errors in your posting to be worth my while. Suffice to say, you should learn how debt forgiveness is taxed before commenting on whether it’s correct. Check http://www.irs.gov for a primer.

And by the way – yes, the entity that made the loan gets a deduction for the bad debt, but recoveries are brought back into income, and foreclosed houses don’t sell for much. The net deduction realized by an entity over the course of these transactions (loan/foreclosure/bad debt/recovery) is equal to the actual cash lost. The bailout is a different matter, but if done right (I know, I know, we’re talking about politicians, so the odds of that are slim) the taxpayers should earn a return on this.

By: Foreclosures, Debt Forgiveness and Mortgage Losses Explained | taxgirl

Foreclosures, Debt Forgiveness and Mortgage Losses Explained | taxgirl — Sat, 11 Oct 2008 23:10:37 +0000

[...] a lot of good discussion on the Fix the Tax Code Friday comments thread about debt cancellation and mortgage debt cancellation relie…. I started to reply to one of the comments and thought it was best to make it a separate post so [...]

By: Kelly

Kelly — Sat, 11 Oct 2008 21:25:43 +0000

David,

I’m going to post a separate piece about this…

By: Norma

Norma — Sat, 11 Oct 2008 19:43:02 +0000

It is a hard question,but there is always someone worse. A mortgage re- finance was done on our house for 80,000 of which almost 3500 was to come to us. The 3500 was a bounced check of which the title company has since gone bankrupt the mortgage broker, of course, broke it to another company and also has filed bankruptcy. So here I am with messed up mortgage papers They took my name off the house (by mistake) my husband has since died, and I am on a disability. I am making my mortgage. We also had started a bankruptcy case,which I am making the payments on. I have been know to cry a lot because this is a mess, but wait there is a
bright side, someone may be worse off. Tax break where I don’t even get to claim interest on my house, my income is too low. Have a good one