Right now, let’s say I buy a house for $800,000, and sell it in a short sale for $700,000 with a mortgage balance of $750,000. I’m going to be taxed on that $50,000. It would be a useful and reasonable thing to allow the short sale income to be offset by a capital loss in the sale of the house (I wouldn’t let it be a straight deduction necessarily). This means that people who’ve already suffered severe losses in the market won’t get hit with an additional tax bill (I had it happen on a smaller scale ten years ago). This won’t benefit everyone: The person who buys at $200,000, takes out a pile of home equity loans as their property goes up in value and ends up doing a short sale at $300,000 with a mortgage of $350,000 is still going to be pretty screwed (they’ll have capital gains tax on $100K plus ordinary income of $50K).

I wholly agree. Bailing out with economic cash injections to get people out of trouble is like the Parent who gives his kid everything and they never learn for themselves. If people are dumb enough not to pick up a calculator and do some basic 3rd grade math to figure out the “Gee, the house we just bought costs more per month than we make!” then they need to feel the pain of the consequence. The same goes for the lenders that duped these people. Also, not reading the contract is no excuse. Not doing their homework and due diligince is no excuse. Ingorance is no excuse.

Bailing these idiots out is also no excuse and is a great way to play the sympathy of distressed homeowners. What better song to sing to Joe& Mary Public who are buried because of their own economic stupidity?

I’m mad as hell and not going to take it anymore.

I’m not a democrat yet, but Obama makes me want to be one. I’ve got no bone to pick with the parties themselves, but rather I can’t wait until we get boomers out with their petty whining and pandering to bleeding heart special interests and minorities. What about the majority? To we just go get bent? Well, screw you too. I may have to take on a political agenda (not against a specific party, mind you) against apathy.

The stupidity of lawmakers makes me want to scream sometimes.

Chuck Ponzi

They will probably get some form of bailout. As a middle age white male I’ll probably end up marginalized again.

Its really really tough to walk the fine line in this society that doesn’t throw things out of balance one way or the other. Rewarding bad behavior too much or not offering some kind of help.

Guess looking back at the older welfare system; we rewarded people for not working and having more children. So they didn’t work and had more kids. Vicous cycle.

Now, we might reward malinvestment or overspending at the expense of the hard working saver. Getting real close to the point where I quit my job and spend time with the kids.

I can feel the pain comming.

We have FDIC insurance for the banks and that will bail them out from the mess. They get the rewards of high profits and we get crushed with the debt. Shouldn’t Dodd be questioning that aspect.

We should also be looking at the underwriters to see if they did do dilegence. Similar to what we saw with the A. Anderson scandal.

Nope. We just plan on taking money from middle class guy that is paying a high tax rate already. Hand it to someone else so housing stays unaffordable. I’ll have much less effective income and much hihger prices to look at next year.

Its not just me but it will also screw all the young families that didn’t get swept up in this. Not to mention all the people that lost their houses in the last couple of years (some of my family member included).

All those supposed “victims”… two years ago the accountant that did my taxes remarked my refund of 12000$ was a nice peice of chump change. Minority female tax preparer… bragged about her worth being so high because she owned a house in LA.

She will be right there with them crying victim when this disintegrates. bet she Heloc’d for a Lincon navigator and a cruise in the bahama’s.

Me, I’m driving a Civic and camping in Big Bear for vacation.

Anyhow… like to see them back away from this stuff and try to encourage good behavior instead of decreasing rewards for it.