THE MESS LEFT BEHIND: TAXATION OF POST-DEATH FORECLOSURES
By James P. Lamping, Esq.*
"A man who pays his bills on time is soon forgotten." – Oscar Wilde
The foreclosure of real property raises a number of income tax issues. These issues may become more complicated when they arise during the administration of a decedent’s estate.1 Personal representatives who think they may simply walk away from real property secured by a mortgage may be in for a rude surprise when the tax bill arrives. It therefore is imperative that the attorney recognize and advise the personal representative on the tax implications of a foreclosure, so that the fiduciary charged with administering the estate can make educated decisions.