Legal Question in Real Estate Law in Arizona

I received a call from a mortgage broker who my current mortgage company gave my information to. They are offering to refinance my home (who's value is currently less than what I owe) They are working with my current mortgage company to what they call relieve (they write off) the difference between what I currently owe and what it now has appraised for. They indicate that I will get a tax form for the relieved amount but that since it is my primary residence and I have lived in it more than two years, it will not affect my tax obligation. Is this true? Thank you, Darren


Asked on 9/10/09, 9:53 pm

1 Answer from Attorneys
Dustin Vidrine Wade & Vidrine, PLC

Consult an accountant. It is true that living in your primary residence for 2 out of the last 5 years will qualify a person for a non-taxable gain when selling the home. What the broker is referring to is forgiving a loan, which is a whole other tax obligation and not within the same realm of the capital gains off the sale of a residence. This is not to say that there may be some other tax avoidance out there, but one to check with an accountant first, as it seems that the broker is confusing some things.

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Answered on 9/17/09, 9:35 am


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