2014 BofA Mortgage Settlement Question Regarding Taxes on Loan Forgiveness

[switch625]

Anyone out there have a BofA mortgage or home equity that had principal reduction or lien extinguishment/ loan forgiveness as a result of the 2014 DOJ settlement agreement? In that agreement, BofA set aside funds to pay the Federal taxes that would be due on the forgiveness of this debt for homeowners that were helped by this. Did you ever get notification that your taxes were actually paid by the settlement administrator? You may have received a letter stating that your taxes will be paid, but I want to know if it was ever confirmed that they were paid? Or is this a matter of finding out in January 2016 when 1099s usually get mailed out.

[spidge]

Sorry. I have no info for you on this. I am still a bit confused as to why my 2nd was not included.

[LadyInTheRed]

I think this will help: http://bankofamerica.mortgagesettlem...om/tax-relief/

Not the section re congressional action. If your loan was forgiven in 2014, BoA will make no tax payment because you will not have to pay tax on the forgiven amount. If your loan was forgiven in 2015, whether BoA will pay the tax depends on whether congress extends the 2007 act to 2015.

[switch625]

I think this will help: http://bankofamerica.mortgagesettlem...om/tax-relief/

Not the section re congressional action. If your loan was forgiven in 2014, BoA will make no tax payment because you will not have to pay tax on the forgiven amount. If your loan was forgiven in 2015, whether BoA will pay the tax depends on whether congress extends the 2007 act to 2015.

I called that website's 800 number a couple months ago. They won't talk to me because attorney is repping me and I haven't gotten around to getting consent for them to talk to me, no have I tried the "I have a general question" angle with the administrator's reps. I'm thinking that the administrator is waiting until the last minute to see if Congress extends the act.

[LadyInTheRed]

So your loan was forgiven this year? It makes sense that they would wait to see if the act is extended. There is no sense in paying a tax that may not ever become due.

The answer to your question about notification of paying taxes is on that website:

Reporting of Tax Payment

After the Monitor makes a payment to the IRS on a homeowner’s behalf, the Monitor will send the homeowner a Form 1099-MISC that will:

1. Confirm that a tax payment has been made to the IRS on the homeowner’s behalf; and
2. Confirm that the amount of the tax payment has been reported to the IRS as additional income to the homeowner.

[switch625]

So your loan was forgiven this year? It makes sense that they would wait to see if the act is extended. There is no sense in paying a tax that may not ever become due.

Yes, it was forgiven this year. It looks possible that Congress will extend the loan forgiveness through 2015 as well. http://www.bostonherald.com/business...nefit_renewals.

Thanks for looking this up. Hop you are enjoying post-discharge debt freedom!