Legal Question in Real Estate Law in California

Capitol gains in a horrible situation

My parents have turned their home ''upside down'' in the mortgage. They purchased the home 45 years ago for $62,000 - it is worth about $100,200,000.00 currently. Their credit has been perfect up until this point. This month they will not pay the mortgage payment for the first time. We have to leave. Should we walk away, short sale (for about $800,000), or try to sell on the market? My concern is capital gains - he has NO MONEY left. The advice I have gotten from a couple of bankruptcy attorneys is that we should walk away and let the bank worry about it to avoid capitol gains, the PPP, and discharge of debt issues. This seems scary and really odd to me. My parents are 82 and 84 - they are victims of Elder Abuse by a guy who drained them of their money. Help.


Asked on 6/19/08, 12:47 am

2 Answers from Attorneys
Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE

Re: Capitol gains in a horrible situation

"They are victims of elder abuse by a guy who drained them of their money." The main event here is not Mom and Dad having to leave their home, but how on earth did they become victimized for over $100 million dollars? Didn't they start to wonder after the first $90 million was gone? Have you contacted the police or the DA's office? Have you contacted an attorney to try to have the mortgage rescinded?

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Answered on 6/19/08, 1:47 am
Mitchell Roth MW Roth, Professional Law Corporation

Re: Capitol gains in a horrible situation

Hire an attorney to help you help your parents. If the house can be sold for a profit (i.e.) more than the debt, do so. Since they reside there they will get the first $500k of gain tax free. Or consider that the loans and the foreclosure can be fought under various theories.

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Answered on 6/21/08, 5:21 pm


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