Quote:
Originally Posted by Jim Richards
How does the IRS treat this jingle mail? It seems that a loss eaten by the bank when the homeowner mails in his keys is a gain for the defaulter.
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That used to be the case and the defaulter got a 1099 for the amount forgiven. Imagine getting one of those for in the six figures and not knowing it was coming. I think that law was changed last year though, so that loan mods and deeds in lieu of, etc. were no longer considered taxable income.