Government Tax on Foreclosure of Properties
The Internal Revenue Service is the dominant taxing agency in the United States. Better known as the IRS, the Internal Revenue Service, levies taxes for the federal government. When an individual fails to pay his or her property tax payments for the property that he or she purchased the federal government has within its power, the right to cease that property.
This action, known as a foreclosure transfers the ownership of that property from the individual to the federal government. The Internal Revenue Service states that if an individual transfer the title of ownership on a home, whether through warrant, deed, grant, or through involuntary actions, such as a foreclosure, the tangible property is essentially sold. In this event, government tax on foreclosure of properties may be instituted on the former property owner.
The Internal Revenue Service has rules that state tax foreclosure property listings are essentially a penalty for falling behind on tax payments. In essence, this government tax on the foreclosure of properties is an additional form of interest payments attached to the distressed mortgage.
When a property force closed on the individual is stripped of his or her equity that was once owned through timely mortgage payments. The government forecloses on the property, signs the title over to the bank that owned the mortgage, so that institution could resell the property to a more suitable buyer. In order to properly execute government resources must be utilized by the federal government. As a result, government tax on the foreclosure of properties will be levied to balance the resources expended.
