presented by
Buying Note AND Property in Foreclosure
I'm trying to bring together a deal and it made me think of a potential tax question.
I'm putting together a deal to buy a property in foreclosure. The property is an estate and there is a small mortgage in foreclosure. There are other issues going on where it would be beneficial to take a few extra months to close, but unfortunately the property is scheduled for Sheriff's sale so time has become more critical.
So, I have made an offer to buy the note from the lender. If I was to purchase the note, obviously I don't need to proceed with the foreclosure. However, when the time does come to close, I'm wondering if I could choose to accept a "short sale" aka LOSS on the note and bank that loss to offset any gain. I would of course pay proportionally less on the sale price of the property. So, my total out of pocket buying the note and the sale price would remain the same, but I would show a LOSS on the note that could give me a tax benefit.
Any thoughts on this?
I'm putting together a deal to buy a property in foreclosure. The property is an estate and there is a small mortgage in foreclosure. There are other issues going on where it would be beneficial to take a few extra months to close, but unfortunately the property is scheduled for Sheriff's sale so time has become more critical.
So, I have made an offer to buy the note from the lender. If I was to purchase the note, obviously I don't need to proceed with the foreclosure. However, when the time does come to close, I'm wondering if I could choose to accept a "short sale" aka LOSS on the note and bank that loss to offset any gain. I would of course pay proportionally less on the sale price of the property. So, my total out of pocket buying the note and the sale price would remain the same, but I would show a LOSS on the note that could give me a tax benefit.
Any thoughts on this?