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  1. #1
    Join Date
    Jul 2015
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    2

    Default Can You Write Off Losses from a Real Estate Foreclosure

    My question involves personal property located in the State of: Colorado

    I was in a purchase agreement to buy land in Colorado for 86,000 at 7 percent interest. I found out the land was only valued at 16,000.
    I had paid on the land for three years and was about to have the title given over to me when I was laid off from my job. Before I was able to start payments again billyland foreclosed. I offered a lower payment and they refused. I am out about 24,000 dollars and would like to know how to best write this loss off on my taxes. The land was held for future development.

  2. #2
    Join Date
    Oct 2014
    Posts
    8,238

    Default Re: How Do I Recoop Loss from Propertly Forclosed by Billyland when Unemployed on Tax

    Quote Quoting lizadeyo
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    My question involves personal property located in the State of: Colorado

    I was in a purchase agreement to buy land in Colorado for 86,000 at 7 percent interest. I found out the land was only valued at 16,000.
    I had paid on the land for three years and was about to have the title given over to me when I was laid off from my job. Before I was able to start payments again billyland foreclosed. I offered a lower payment and they refused. I am out about 24,000 dollars and would like to know how to best write this loss off on my taxes. The land was held for future development.
    It’d be necessary to read the documents involved in the deal to make sure exactly what kind of transaction this was. It makes a difference whether for tax purposes you were considered to have bought the property and the seller was considered to hold effectively a mortgage/deed of trust on the property or whether this was effectively a lease transaction with some kind of option to get title at the end. Your post indicates you did not get title to the property at the start of this transaction. Instead what you are describing may have been contract for deed (also known as an installment land contract) in which you make a series of payments per the contract and only get the title after all the payments are made. You say the total contract amount was $86,000 and you were about to get title, but you are out only $24,000. I’m not sure if being “out” $24,000 means that $24,000 is what you paid or whether you are saying that’s what you paid over the actual value of the land or what. But in a typical contract for deed, you’d be nowhere near getting title after paying just $24,000 of the price. So exactly what were the terms of this deal? What were you supposed to pay and when were you supposed to get title to the property? Were you obligated to pay the full amount of the contract or could you have simply stopped payments at any time and walked away owing nothing more? And did you record this contract with the clerk and recorder’s office for your county?

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