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John P Fazzio III
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John Fazzio’s Answers

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  • Is there different tax treatment for non-US citizen or non-resident?

    I am selling a condo unit which I purchased less than 1 year ago. I have foreign passport. Is there different tax treatment for non-US citizen or non-resident?

    John’s Answer

    Ms. Syed has it right. As a permanent resident you are subject to the 30% withholding regime wherein you must pay over this amount toward the gain. A non-resident or NRA does not have the same obligations as a permanent resident.

    But FIRPTA still comes into play even if you are a non-resident or NRA. And 10% of the gain can be collected on sale.

    Best case scenario, you still have to pay capital gain rates for long term capital gain (if sold after 1 year, not yet the case) of 15%. 10% of the Amount Realized would also be collected for FIRPTA tax -- essentially, in order to ensure you actually pay the US taxes due. So you are talking a tax obligation of 15% to 25% of the gain as a best case.

    You also have to factor in how you've been filing and whether you have made the elections to offset with any deductions, depreciation, etc. you may have.

    All-in-all, there is a best case here, that can be determined pretty quickly with all the information. You just need to get a tax adviser involved to steer you through the intricacies.

    You have to carefully analyze the following:

    1 - how assets are held (personally or in corporate solution)
    2 - does 30% backup witholding tax apply and/or is this ECI ("Effectively Connected Income")--the 2nd does not appear to apply
    3 - do I have separate tax on gain for the US Property--reportable on 1040NR or Sched D if ECI

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  • How do I file my taxes? Does she have to pay taxes if she didnt work her or earn any income while on student visa

    I recently married my wife who I met while she was her on a student visa (non working ). We never even lived together after college she went home to help family in asia. I have continued to live and work as a single individual financially. How d...

    John’s Answer

    I had a similar situation with a client recently and could certainly answer any follow-up questions you may have.

    This is a bit of a tricky issue. If you file married filing joint, you'll have to include her income earned overseas, if any.

    If you file married filing separate, you'll be penalized and overpay.

    If you file single, even though you are married, the return may be examined. However, and while it is legally a gray area, I believe in this situation, if she did not live with you, and you did not start a household together, then you can still file single until such time as she moves back in with you---and then you can start filing married filing joint---when she is in the US full time.

    The reason I believe this is the case is that there are definitions and notes in various IRS regulations regarding filing status that give me good grounds to believe this is the proper approach. Admittedly, however, this is not the traditional advice and may be a bit risky. Thus, I would only recommend it if your wife had significant earnings overseas that should not be subject to US tax.

    Another option is to file married filing joint, but claim Treaty Benefits for the foreign-source income she earned in Asia.

    One last, important, point. Immigration wants to see a few years of tax returns, especially if she was a US Resident. If she is hear primarily on a Visa, I imagine you are getting into the process of filing to get her a green card and/or naturalize her soon. She apparently is not in a position to move-in with you full-time until she finishes school and would ostensibly then be in a position to enter the job market.

    You want to reflect the marriage and reflect the consequences of marriage including tax filings are being respected -- before you have immigration interviews. So, I would consult an immigration attorney on this, and/or ask for whatever attorney you hire to work out the tax issue (if any) to give you some advice about the immigration process as well -- after fully setting out your plans.

    Hope this helps!

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  • 60days notice or 90days notice to evict tenants (foreclosure)?

    I am a new owner of the property. I got it through the foreclosure sale. Current tenant is not a former owner but have a lease agreement with the former owner, and lease is month to month now. I have not renew the lease agreement with them(th...

    John’s Answer

    I think Mr. Roach has summed it up nicely. When dealing with the Sheriff's Office after the notices are sent, be sure to have the chain of lease agreements, including your Assignment of Rents documents in tow.

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  • I'm looking for CT attorney that specializes in subprime lending, mortgage securitization, and foreclosure defense?

    In August 2007, mortgage lender proceeded with foreclosure for failure to pay. Due to the mortgage lender misapplying a large amount of my payments in January 2008, the courts ordered in my favor. Due to the mortgage lender ignoring the court ord...

    John’s Answer

    Mr. Vincenzo is correct. We can not directly solicit business on this forum. Mr. Vincenzo and myself both practice in CT and you can also look and compare other attorneys by using Avvo's Find a Lawyer tool.

    From what you've said I would make a few comments. First, you potentially have a claim under FDCPA or FCRA to have any derogatory marks removed from your credit. Both an attorney and/or a competent credit repair specialist can assist you with something like this. This is separate and apart from your foreclosure case.

    Second, the foreclosure case itself has a long and tortured history. For an attorney to unravel it and determine the proper course of action is going to be a bit expensive. It is also going to take time. Be prepared for this in advance.

    Third, with defaulted debt obligations with problems, it is common for the loan to be passed around like a hot potato. With an attorney's help, you may be able to be properly reviewed for a modification, even though this has not been done to date. Other options include selling the property, even potentially to a related borrower, moving out, renting the property and filing a Ch. 11 bankruptcy to cram down the arrears and clear-up the loan value---although this comes with further credit damage. Sometimes, in a case like this, a cash for keys deal with a large downpayment and a removal of derogatory credit marks can be achieved.

    So, in closing, it depends largely what you want to accomplish. But, have a s clear an idea as possible of your goal when consulting with different attorneys. There are certainly a number of attorneys like myself out there who are competent in this area.

    One closing point is that CT is a non-judicial foreclosure state, and judicial foreclosures in CT relate mainly to properties where there is equity. It sounds like you are in the "judicial" process. This either means you still have equity in the property on paper or there is something else going on that isn't entirely clear from your description.

    Good luck bringing the case to resolution.

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  • Is there anything I can do?

    Requested a forbearance with chase to get caught up on payments and they denied me based on my loan being backed by USDA Rural developement. They knew that before I applied. Instead they let me get farther behind and now there threatening me with ...

    John’s Answer

    I like Lloyd Brooks's suggestion.

    When you get bank representatives on the phone because you are behind on payments, their job is to represent the banks interests, not yours. Given the complexity of these matters, finding customer service representatives with the knowledge-base to offer clear guidance is too expensive, and banks hire people who at best can soothe your anxiety, and at worst will give you disastrous advice.

    Point being, USDA-backed loans fall under rigid HUD regulation and banks are notoriously bad at understanding the available options and properly processing loss mitigation requests.

    They weren't lying to you or being intentionally malicious. Forbearance is a very common alternative to foreclosure. The people you spoke with simply don't know the interplay with the type of rural development loan you have, and which programs are offered.

    A good starting point would be to contact USDA directly and find a specialist there who knows about these kind of loans and what can/can't be done. Then you will have to educate the bank on which options apply and advocate for a forbearance or cap+extend modification solution that meets your needs.

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  • Can the lender try to recover deficiency via collections company? Or are they barred in every way from trying to collect?

    In Nevada, a lender has six months after a foreclosure to sue a borrower for the deficiency NRS 40.455(1) My situation is typical non-judicial foreclosure. Foreclosure was in May 2015. 6 months was at the end of November so I understand that they'...

    John’s Answer

    A lender generally will not look to file an action to recover a deficiency on a foreclosed home. The bad press banks would get from coming after homeowners who have lost their homes has been a sufficient deterrent to prevent this kind of predatory behavior from occurring.

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  • Can I reassign the deed to my Welk Timeshare back to Welk without their signature or permission since it is under a mortgage?

    I have a Welk Timeshare, a deeded property, which i purchased because the sales reps stated this was an investment and that it will appreciate very quickly. I now find that my "investment" is actually worthless, it is NOT an investment and in fact...

    John’s Answer

    You cannot unilaterally deed the property rights back to the seller. You may have legal options to rescind or cancel the contract and unwind it in court. You may have a case for violations of consumer rights laws. To explore these options you need to bring all of your documentation to a local attorney practicing in the area of consumer rights and who is knowledgeable about timeshares.

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  • What is the Statute of Limitations on Foreclosures in Oregon?

    What is the Statute of Limitations on Foreclosures in Oregon? But, also, when does the time start running? Are there tolling situations. The default on my home was in Jan 2009…7 years ago. However, I did file bankruptcy, which was discharged in ...

    John’s Answer

    Leonard Boyer correctly points out the statute of limitations is 6 years. I do not know Oregon law. However, bankruptcy generally does not toll the statute of limitations. One tricky issue in many states is when the statute starts to run. Generally, the loan, and hence the maturity date, must be accelerated, so the full amount becomes immediately due and owing. You should consult with a local foreclosure attorney.

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  • What can I do ? can I sell it in foreclosure status?

    I own a rental property in my area, renters don't pay so I have had empty off and on for 3years ...I could never catch up with the taxes .so a lien was placed on it someone purchased the tax lien .I received a foreclosure action letter they said 3...

    John’s Answer

    You can sell a property that is in foreclosure status. If the purchase price is more than what you owe the bank it is a straight sale. If the purchase price is less than what you owe the bank, you need the bank's agreement to the sale, and this is called a short sale.

    If the property is "in the money" and is not "under water" then you can potentially sell it and walk away with money. For the prices in Willingobro today and the described condition of the property, I am doubtful there is enough equity to cover the costs of sale (i.e., broker's commissions, attorneys fee, transfer tax, etc.). If the math does not work out, there is not much point in selling it, except potentially to avoid having as severe of a derogatory mark on your credit. Your FICO or Fair Isaac score will fall the same amount for a sheriff's sale, deed in lieu, settlement, or short sale. However, having the account marked "settled" or "satisfied" because you did a short sale will make a big difference the next time you go to a bank for financing.

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  • Where in Title 26 does it state how long does the IRS have to decide on the abatement of a 6694(b) penalty?

    I am looking through the IRC and I cant find it. I was wondering, WITHOUT BEING SUGGESTED TO HIRE AN ATTORNEY, where does it give the IRS a set time limit for the IRS to abate penalties from a filed Form 6118? Just for reference, the form along wi...

    John’s Answer

    • Selected as best answer

    To answer your question, someone is going to have to do some substantial research under the Code. But, the answer will be absolutely useless to you, because the rendition of your facts is not enough to give you an answer about your specific situation. There are a lot of "hard" factors and a lot of "soft" factors to take into account -- for instance -- someone needs to see the IRS transcripts and where the matter has been sourced within the IRS to give you any meaningful idea what is going on.

    In making many penalty abatement applications, they frequently take quite a long time for the IRS to take action on. 2 years before getting a form response is not uncommon. The IRS is not in a big rush to abate penalties and they are completely understaffed and overwhelmed, and they are operating at 2x, 3x and 4x normal timeframes for processing requests.

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