Taxation of Worthless and Abandoned Partnership Interests

Homeowners are taxpayers first before they are mortgagors and only the mortgagor can fall into default. Auditors who reconstruct the general ledger know that accounting is empirical, it is damning and prima facie to all fact in a matter.

The tax payer is a mortgagor who’s earnings and  credit qualified  him for financing received on the date shown on the final HUD 1 statement.

The property was sold at closing under the TRANSFER RIGHTS IN PROPERTY by tax deferred exchange

The note was cancelled at 135% of its face value

Cancellation of debt causes the involuntary conversion of title into consideration paid. The sale is tax deferred  and recognized but not realized until the year of disposition.

The amount paid at 135 percent of the cancelled note is expensed by an LLC as ordinary and credited back to LLC Directors as a pass through.

THIS MEANS THE HOME IS SOLD AND ITS APPRECIATED VALUE PAID OUT IN 20 SEMI-ANNUAL INSTALLMENTS TO YOU AS WAGES ORDINARY INCOME FOR PROPERTY PLACED INTO SERVICE.

SERVICES RENDERED

YR SALE  …..   586,300.00
135 PERC ….   791,505.00

12 YRS     …..    205,205.00
PER YR    …..   16,945.09

COUPON …..    2.890%

CAPITALIZED 7,100,093.00
FACTORED        586,300.000

Borrowers are by involuntary conversion held to having exchanged title for member bank sponsored investments shares of corpus paid to  corporations such as Bank of America or BAC partnerships.

Just how the court can hear the tax matter issues is unknown. The foreclosure courts lack the jurisdiction for determining the type and for what consideration the abandonment is made.

Nor can it hear or decide the matter of  ordinary versus capital gains using 12 years of installments  versus the  same amount carried annually as net operating income . Its generally held to lack jurisdiction to even consider the non nonrecognition rules and requirements in tax deferred series of  like kind exchanges  where servicing rights are barred and mortgage debt was cancelled

Therefore the court is asked to consider dismissing the foreclosing agent claims  hearing the matter of foreclosure  that falls under the U S Tax Code section 1033 and CFR 1.751  constructive liquidation of a  tax matter partnership interest .

registerclaims@live.com

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