Central Valley real estate agent Donny Piwowarski last year sold his four-bedroom, 3,500-square-foot house on a half-acre in Tracy for $387,000 — about half of what he paid for it in 2005. Now with tax-filing season here, his situation is getting even grimmer.
Under California tax law, Piwowarski owes tens of thousands of dollars in state income tax on the nearly $400,000 in mortgage debt that was "canceled" when he sold his house for less than what he owed. The state considers canceled debt as taxable income in cases like Piwowarski's and for thousands of other Californians who got rid of their homes last year in so-called "short sales."
Since 2007, federal law has seen things differently, in many cases sparing sellers any tax on debt canceled in a short sale, foreclosure or loan modification. In 2007 and 2008, California followed the feds' lead, but the state law has not been extended to apply to mortgage debts canceled in 2009.
So an estimated 35,000 California taxpayers may be left owing state tax for 2009 on something the federal government does not consider taxable, according to the state Franchise Tax Board.
Piwowarski is one of them.
"I paid a pretty penny, $765,000, for that house," he said. "Now I have nearly $400,000 in canceled debt sitting out there that ultimately I'm going to be taxed on by California" if the law doesn't change. ''It's kind of like a double whammy."
The Legislature in mid-March approved a bill that would bring the state into conformity with federal tax law on debt cancellation.
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What is lower than a scumbag Federal Reserve bankster? Answer: No one.
ReplyDelete"I paid a pretty penny, $765,000, for that house."
ReplyDeleteActually, no, he did not, never did, and NEVER COULD pay that pretty penny. Stupid sheep; when will they learn? (answer: never)
A banker is like a blood tic.
ReplyDeleteIf you have blood to take, they take it. If you are dry as a bone there is never a break, it just keeps taking and taking, sucking and sucking for that last drop.
Smaller Federal and State Government is the only answer. The guy is probably a Democrat that loves single payer healthcare. Time to pay up buddy!!!
ReplyDeleteAn honest government that isn't the most corrupt large government on the planet would come before 'smaller.' One that isn't just a puppet regime controlled by Oligarch bankers would be very nice. One that doesn't stage false flags and then have thugs running around the NYC subway with riot gear and AR15s would also be nice.
ReplyDeleteAnd who paid the $400,000? Me! And do I get any tax break for having to pay it?
ReplyDeleteOnce again it is time to review this documentary that explains exactly WHO is running the United States: "The Obama Deception"
ReplyDeletePlease goto: http://www.youtube.com/watch?v=eAaQNACwaLw
Banksterism = True Terrorism
I wish politicians would have to pay a tax on cancelled faith. We could pay off the national debt.
ReplyDeleteI've heard of people owing state tax leaving the state; it may not be legal now but it was in l994 when a neighbor moved to Texas who was self employed that did not file/pay state tax.
ReplyDeleteCalifornication at it's best
ReplyDeleteThe state rocks with it's climate, beauty and diversity but I would not give anyone a plug nickle to move there
What exactly is a plug nickle ?
ReplyDeleteA nickle with a plug in it ?
A plug with a nickle in it ?
Hmmmm
It is income. The bank gave him $xxx,xxx.xx. He doesn't have to pay it back. It wasn't a gift and it wasn't loan, cause loans you have to pay back. Why wouldn't that be income?
ReplyDeleteNow I'm sure the bank wants to write it off as a bad loan, as well they should, so the other side of that write off would be income.
He should be happy at only having to pay 35% of the loan amount in income taxes. Paying back the principal with interest would cost much more. He'd be under the yoke of debt for years longer. Plus if housing prices return in another 5-10 years he'll get the benefit of that appreciation too.
He should stop complaining. He's getting off light for someone that paid twice what an asset was worth. I wonder what Donny thinks should happen to folks who pay too much. Maybe we should all get a mulligan, huh?
I don't feel sorry for the guy. Most people don't use their brains. Anytime you buy anything it can depreciate in value. Real estate is just like stocks you take a gamble of losing money when you invest. Sounds like the guy had more money then sense. The government is going to suck the people of as much money as they can.
ReplyDeletedon't pay.
ReplyDelete