Deficiency Judgement And 1099 ?
Do you know about deficiency judgement and 1099 ? i know deficiency judgement is issue when a bank wants the difference between mortgage and the discount amount but do the seller have to pay the judgement right away and do they have to pay it in full?
i understand 1099 is issue when the bank forgive the debtor the difference but exactly what is a 1099.. for ex: owe= 100,000 , discount= 60,000 , difference= 40,000. does the seller have to pay the 40,000 to IRS or just the taxes on the 40,000 ?
you asked, "but do the seller have to pay the judgement right away and do they have to pay it in full?"
A judgment results from a legal process... the debtor can pay in full, in negotiated installments, or not at all.
you asked, "does the seller have to pay the 40,000 to IRS or just the taxes on the 40,000 ?"
The amount in question is the forgiven $40,000 that the IRS considers taxable income. The answer depends upon the Seller's income tax bracket, and whether all or part of the forgiven debt is exempt from tax.
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taxable income ? thats the part i dont understand..can you please explain to me what is taxable income ...
thanks .....................
Running the risk of seeming 'harsh' I again suggest that you do some serious reading...... and assemble the right tools for the job.