deed in lieu tax implication

Forum|Forum|11 months ago
April 23, 2025
1 reply
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What is the tax implication for deed in lieu foreclosure?

TurboTax Online

Vanessa A

It depends. It may have tax consequences or it may not. It will depend on the amount of debt you owe, and the market value of the property and your cost basis in the property.

If your cost basis in the property is greater than the market value or the amount you owe, then you would not have any tax liability on this transaction.

However, if your cost basis is less than the amount you owe or the FMV, then you would have a gain and a tax liability.

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tomvtvAuthor

How can I remove that property (from Deed in lieu) from my account?

I was rent out for 3 months in 2025. Can I still deduct for those 3 months?

It transfer back to the lender (from Deed in lieu) later this month.

How can I remove that property from my file?

Plz advise

Vanessa A

Why are you removing it? Did this occur in 2024 or 2025? Did you put it on your 2024 taxes? Whether or not it was taxable, it should still be reported, but it should be reported in the year that it happens.

What does the rent have to do with it? Rent is not a deductible expense for any personal reasons.

If you surrendered the property and are receiving a benefit from it (no more mortgage) then you would not remove it from your file unless you are reporting it on the wrong year.

If you are reporting it on the wrong years return, then you would go back to the spot where you entered it and then click the trash can to delete it or just remove all the entries.

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