Comments on: California Housing Prices: 3 Different Measures Showing Different Prices. Calibrating Housing Prices for California.

By: cariqunyil

cariqunyil — Sat, 02 Aug 2008 19:16:56 +0000

Not true. President Bush signed a bill that already amended the tax code in January 2008 so that the homedebtor no longer has to pay the IRS for the “Phantom Tax” on a primary residence.

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648

By: exit

exit — Fri, 01 Aug 2008 17:20:38 +0000

@Mike P

Not necessarily. California is a purchase money ‘non-recourse’ state, meaning that if that loan was used to buy the house (and was not a refinance) there is NO 1099 issued. The bank eats it. Also, in 2007 some IRS rules were changed regarding when banks can issue 1099′s. Ask your accountant – since it’s August, he’s probably getting ready for a fishing trip and isn’t overly burdened by filing tax returns.

All these government bailout attempts? I just get this image of a drowning man underwater, trying to gasp air through a straw, and the ‘rescuers’ come along and just attach another straw, so he can sink even lower. Meanwhile, the rescuers buddies are going through the backpack left on the beach and taking the drowning man’s wallet and Maui Jim sunglasses.

By: dutchtrader

dutchtrader — Fri, 01 Aug 2008 16:39:18 +0000

Mike P,

To my knowledge it is only forgiving if it is a short sale. Remember California loans are non recourse and the house is the only collateral.

By: Mike P

Mike P — Fri, 01 Aug 2008 15:25:59 +0000

Walking away from a property may not be advisable because of the tax effects. Assume the value of the property drops from $800K to $400K and the note is for $800k. The homedebtor walks away, jinglemail. The bank sells the property and takes a $400K hit. At this point, the bank has given the homedebtor a “present” of 400K. This is taxable income. The IRS will demand the homedebtor pay tax on this present, maybe $125K. If they cannot pay come next April 15, interest on the delinquent tax accrues at 12-18%. So even if you can take a hit on your credit by walking away, you will still have to come up with a sizable chunk for the IRS almost immediately.

By: hampsteadgirl

hampsteadgirl — Fri, 01 Aug 2008 10:06:33 +0000

Does anyone miss Gray Davis now?
I would if I was living there.
Arnold cuts back on wages.
That’s gonna throw a lotta people upside down.
It’s diabolical.
Pissing gasoline on the campfire.
Government is supposed to cut in good times and spend in bad.
Wow!
I’m glad I live in Canada.