Federal Tax Lien Attached to my primary residence- Where to list on Sch D or E?

[bntactnt]

Hello from San Diego CA,

I have federal tax liens attached to my primary home.

The valuation of my home is about $327K less than what I owe on the first Mortgage; I only have 1 mortgage.

My next agenda is dealing with these federal tax liens. I completely understand about the 5-rules to discharging tax liability and I do qualify. I will be filing Motion to Strip these tax liens.

But for now, where you I list the tax liens, on schedule D or E?

I know tax liabilities are listed on Schedule E.

Please review and help.

Thanks!

[despritfreya]

I hope you have an attny because, by your post, I already am assuming you do not understand tax liens. The IRS is secured by EVERYTHING you own, not just the residence. This includes the clothes you are wearing. The lien's value is based upon the value of all of your otherwise unencumbered assets (including any equity in those assets that have superior liens). If the taxes meet dischargeability but for the lien, you will discharge all taxes but the lien will survive and will be worth the value of the equity in your assets. It is the value of the equity plus interest that gets paid through the Plan.

You do not need to “strip off” the home lien. The IRS will file a POC. The secured portion of the POC will match the equity you list in your personal (not real) property (unless the IRS thinks you vastly undervalued something). The IRS, through the Chapter 13, will not assert its lien has any value as it relates to the residence (if the residence is truly underwater) however, during the course of the 13, if you wish to sell the home, you will have to get the IRS to agree to release the lien (not a big deal).

The IRS is listed on Schedule D and is secured up to the value of the personal property. The Plan treats it as secured for a portion of the otherwise dischargeable taxes and pays the claim with interest (approximately 4%).

Des.