QUESTION DETAIL
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I had a lease for a coffee shop at our hospital. The admistrator chose to evict me without cause. He in turn allowed another person to come in my spot. I have a business loan and my home was used as security. I had to remove everything out of the location. I owned everything, we built in cabinets, counters and so on. The only thing that I have that can be sold is the equipment. The other things are now worthless since it has been dismantled. The bank wants to foreclose on the loan. I am not working and the business no longer exist. I need to pay the bank. Is the amount of the loan that is cancelled, taxable?
ANSWER
The BIDaWIZ Team's Answer:
Is the loan is considered a non-resource loan which means the lender's only remedy in case of default is to repossess the property being financed or used as collateral. If that is the case, then the cancellation of the debt may not be taxable under the Mortgage relief Act of 2007. That may provide you some relief from a tax perspective.
