You cannot deduct a foreclosure on your taxes. You need to retain experienced IL mortgage foreclosure and bankruptcy counsel. Only a mortgage foreclosure and bankruptcy attorney has the expertise to prevent you from having more problems than you can possibly imagine. To properly answer your questions and address your concerns, the best way to handle this is with an in-person consultation with an experienced IL mortgage foreclosure defense and bankruptcy attorney. Use AVVO's Find a Lawyer tool to select a qualified attorney. Good luck. THIS IS NOT LEGAL ADVICE! YOU NEED TO SPEAK TO AN ATTORNEY WHO IS LICENSED IN YOUR STATE FOR LEGAL ADVICE. This is merely suggestions for you to think about in discussing your situation with the local attorney. Good luck.
If you found this Answer helpful, please mark it as "Best Answer" Please be advised that the answer above is only general in nature cannot be construed as legal advice, given that not enough facts are known. It is your responsibility to retain a lawyer to analyze the facts specific to your particular situation in order to give you specific advice. Specific answers will require cognizance of all pertinent facts about your case. Any answers offered on Avvo are of a general nature only, and are not meant to create an attorney-client relationship.
Although you might seek the advice of an accountant, generally foreclosure losses are not deductible.
You, however, may have a different problem, namely, was the final bid at the judicial sale lower than the amount of the debt?
If there was a deficiency (and frequently there are deficiencies) the mortgage company a) pursue you for the deficiency, or, b) send you a 1099C which is results in a phantom income requiring you to pay income tax on the amount of the deficiency.
If there was a deficiency you may wish to consider filing a Chapter 7 or a Chapter 13 to extinguish the debt.
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