ARE THE ALTERNATIVES TO FORECLOSURE ANY BETTER AS FAR AS MY FICO SCORE IS CONCERNED?

Are the alternatives to foreclosure any better as fare as my FICO score is concerned?

The common alternatives to foreclosure, such as short sales, and deeds-in-lieu of foreclosure are all "not paid as agreed" accounts and considered the same by your FICO® score. This is not to say that these may not be better options for you from a financial perspective, just that they will be considered no better of worse for your FICO score.

If you are considering bankruptcy as an alternative to foreclosure, that may have a greater impact to your FICO score, While a foreclosure is a single account that you default on, declaring bankruptcy has the opportunity to affect multiple accounts and therefore has the potential to have a greater negative impact on your FICO score. source myFICO.com

Can a loss generated from residential or commercial realty be used on the tax return of the investor?

Can a loss generated from residential or commercial realty be used on the tax return of the investor? This question is asked often because there is so much confusion as a result of the passive activity loss rules adopted by Congress in 1986. The answer is yes if the basic rules of the Tax Reform Act of 1986 are met. The tax law states that losses from real estate activities in which the investor does not materially participate can only be used to offset income from passive activities. In this unit we will investigate the concept of losses and the proper calculations for the transfer (sale) of property. At the conclusion of this unit the student will be able to; •restate the passive loss rules •discuss proper calculations for the transfer of property •identify IRS provisions affecting investor taxation debbiesmall.net

What is Cancellation of Debt?

Overview of IRS Cancelation of Debt Income, from the Taxpayer Advocate Service What is Cancellation of Debt? If a taxpayer borrows money from a commercial lender and the lender later cancels or forgives the debt, the taxpayer may have to include the cancelled amount as income for tax purposes, depending on the circumstances. When the taxpayer borrowed the money he or she was not required to include the loan proceeds as income because the taxpayer had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount received as loan proceeds is normally reportable as income because the taxpayer no longer has an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to the taxpayer and the IRS on Form 1099-C, Cancellation of Debt. debbiesmall.net