So a few weeks ago I posted that I was waiting to hear back from my accountant about whether we were going to owe a whopping $22,000 in taxes this year since our 2nd mortgage was forgiven. The fabulous answer is NO we do not owe $22,000. In fact we will be getting back $2,200.
How is this possible?
Well I have a fabulous accountant, Nordstrom and Assoc., here in Flagstaff, but also because we had to declare insolvency.
That sounds like a really scary word. It sounds scarier than bankruptcy, but it's not.
Insolvent just means that you have more debts than you have assets. There was a cool worksheet to fill out that listed all of our debts and all of our possessions including the worth of our house and our business.
What saved us was the low value of our home. According to Zillow, the house we paid $680,000 for back in 2006 is now worth only $435,000. Yeah, I know. Where did my $245,000 go? I feel the same way.
I thought our numbers were going to come up looking horrific, but it wasn't so bad. We were really only about $80,00 upside down, almost exactly the amount of the 2nd mortgage debt that was forgiven. That means that if we now sold everything we had we would break even at $0.
Pretty impressive.
So as tax day looms, I am happy and insolvent.
Things can only get better from here, right?
No comments:
Post a Comment