Bank of America has started sending letters to thousands of homeowners in the United States, offering to forgive a portion of the principal balance on their mortgages by an average of $150,000 each.

http://finance.yahoo.com/news/bank-ameri...02589.html

Of course, this is only for BOA customers who purchased a home above what they could afford, and they're at least 60 days past due.

$25 Billion...how much you wanna bet that BOA still produces a profit?

So "Piddle Down Economics" really works?

I call bullshit.

They're gonna foreclose on these suckers.

Then Uncle Sam will tax them for a capital gain.

Luvapottamus  Wrote:

I call bullshit.

They're gonna foreclose on these suckers.

Then Uncle Sam will tax them for a capital gain.

^^THIS^^
Any forgiven debt would be considered "income" by the IRS. So if your forgiven debt was $150,000 and your yearly income was $25,000 - you just got propelled into the $175k tax bracket and next tax season you would owe the IRS $17,500 if your tax was 10% (it would probably be higher).
Also, you can bet there is some fine print in the new agreement / contract that says if the house is ever sold BoA get's the money.

Luvapottamus  Wrote:

I call bullshit.

They're gonna foreclose on these suckers.

Then Uncle Sam will tax them for a capital gain.

^^THIS^^
Any forgiven debt would be considered "income" by the IRS. So if your forgiven debt was $150,000 and your yearly income was $25,000 - you just got propelled into the $175k tax bracket and next tax season you would owe the IRS $17,500 if your tax was 10% (it would probably be higher).
Also, you can bet there is some fine print in the new agreement / contract that says if the house is ever sold BoA get's the money.

Grendelmort  Wrote:

Luvapottamus  Wrote:

I call bullshit.

They're gonna foreclose on these suckers.

Then Uncle Sam will tax them for a capital gain.

^^THIS^^
Any forgiven debt would be considered "income" by the IRS. So if your forgiven debt was $150,000 and your yearly income was $25,000 - you just got propelled into the $175k tax bracket and next tax season you would owe the IRS $17,500 if your tax was 10% (it would probably be higher).
Also, you can bet there is some fine print in the new agreement / contract that says if the house is ever sold BoA get's the money.

The unintended consequences? Hmmm...

Mike In SATX  Wrote:

Grendelmort  Wrote:

^^THIS^^
Any forgiven debt would be considered "income" by the IRS. So if your forgiven debt was $150,000 and your yearly income was $25,000 - you just got propelled into the $175k tax bracket and next tax season you would owe the IRS $17,500 if your tax was 10% (it would probably be higher).
Also, you can bet there is some fine print in the new agreement / contract that says if the house is ever sold BoA get's the money.

The unintended consequences? Hmmm...

Quid Quo Pro for Nerobama reelection, and QE3, QE4, and QE5

I am glad I lived within my means.
I am glad I saved and saved, foregoing luxuries like quality food and nice gifts for my family.
I am glad I worked 2 jobs.
It allowed me to buy a modest home and not be in debt.

After all, those actions allowed me to pay for outrageous taxes, bond measures, and levies which pay for most of the resources used by the people about to get a huge freebie.