When property is foreclosed, there could be adverse tax consequences, as foreclosures are normally treated as a sale. There are laws that do provide some relief for the foreclosure of a person’s home.  The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. However, the tax laws are complicated and there could still be income resulting from a foreclosure.

This is especially true regarding business properties.

People involved in a foreclosure should seek help with a professional tax advisor to make sure that there are no unpleasant surprises resulting from the foreclosure of property owned by them.  Joseph Falcone is able to help you with respect to foreclosures.