June 584 homes sold.

Within the first two days of July, 43 homes have had offers accepted on them.

All in the cities of Boise, Meridian, Star, Kuna, Garden City and Eagle Idaho.

 We are starting to see entry level homes ($140,000 and below) receive multiple offers on them and prices holding firm here in the Boise area.  Also I just got off the phone with a good friend and very experienced Realtor in So Cal who tells me they are seeing multiple offers (up to 30 offers in some cases) on their entry level properties and prices have climbed 10% in the last month on those home.  Phoenix has seen an increase in activity in the same category but not nearly the numbers or appreciation that So Cal has seen.

• Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief. 
• This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). 
• The exclusion doesn't’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition. 

The simple answer is “maybe”.

There are two possible consequences you must consider: 

Taxable cancellation of debt income. (Note: The cancellation of debt income is not taxable in the case of non-recourse loans.  Idaho is a recourse state.)

• Non-recourse means that the only recourse a lender has in foreclosing is the property (California is a non-recourse state).
  
• Recourse means that the lender has both the property and any other asset you may have available as a means of collecting a debt.  See previous post about deficiency judgment for more details.
  

A reportable gain from the disposition of the home (because foreclosures are treated like sales for tax purposes). (Note: Often some or all of the gain from the sale of a personal residence qualifies for exclusion from income.)

• The key point her is that foreclosures are treated like sales for tax purposes.  This often overlooked by people facing this situation and thus they forget to anticipate this potential liability.
  

To see if you have any taxable gain follow this link to the IRS.gov web site for the calculation.