Legal Question in Real Estate Law in Texas
Duress sale of home.
In 1997 I sold the home I bought with my wife in 1987.
We were getting a divorse and nither of us could afford the mouthly payment alone. She was living in the house at the time. I sold the house for less than
the balance of the loan. I made no money at all on the
sale, but the Internal revenue says I owe a large amount of taxes because the morgage company claims they forgave the balance and the IRS says it is considered income. I was trying to salvage some of my
credit and keep the property from being foreclosed on.
I am retired on disability and do not have the kind of money they are saying I owe.What if anything can I
do.I had morgage insugance. It was a GI loan
1 Answer from Attorneys
Re: Duress sale of home.
This is a difficult problem. If you were insolvent at the time the debt was forgiven by the bank you would not owe tax. I am assuming that the bank issued you a Form 1099, which they also sent to the IRS, where the bank showed the forgiveness of debt. You should have gotten notices from th e IRS that they were propsoing to assess the tax, the so called 90 day letter. During this time period you can file a petition in tax Court to plead your claim If you were insolvent you may get the IRS to reconsider. Call the obudsman or taxpayer services at the IRS. The number should be in the blue pages in the telephone book. tell them your story, maybe you can get relief. Legal costs may exceed what you can afford to solve this problem
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