Ordinarily, the deficiency that remains after a short sale or a foreclosure is treated as income pursuant to IRC §61(a)(12) which states, “[e]xcept as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) […] income from discharge of indebtedness.” That income is reported on Form 1099-C and is taxable unless an exclusion applies. One of these exclusions may be the Mortgage Forgiveness Debt Relief Act. Homeowners who lose their primary residence in foreclosure or through a short sale may not have to report up to $2 million of the cancelled debt as income if the cancelled debt is “qualified principal residence indebtedness.” Qualified principal residence indebtedness is any debt secured by the principal residence that was incurred to buy, build, or substantially improve the same. This exclusion is set to expire on December 31, 2013 unless it is extended as in 2012. This along with other applicable exclusions can be found on IRS Form 982 .
We Have Condominium Owners Who Do Not Pay Their Dues. Can We Deny Them Use of Their Parking Spaces in Order to Force Payment?
July 16th, 2013
A condominium association is specifically prohibited by law from suspending use of parking spaces by unit owners, or occupants, licensees, or invitees of unit owners. See F.S. 718.303(4) (2013). However, the condominium association is able to suspend use of other certain common elements and condominium property, including any amenities (pools, tennis courts, etc.). Before doing so for reason of non-payment (which by law is described as non-payment of a monetary obligation to the Association that is more than 90 days past due), the Board must approve such suspension at a Board meeting and provide written notice of the suspension to the unit owner and, if applicable, the unit owner’s occupant, licensee, or invitee by mail or hand delivery.
The Board is encouraged to discuss with counsel other potential enforcement actions that may be considered in order to collect past due amounts owing to the Association from delinquent owners.