- Low investment cost. You don't have to make a hefty mortgage down payment to buy a tax lien certificate.
- Guaranteed returns.
- The property owner may not redeem the tax lien.
- You may have to wait a long time to see your money.
- The property may have other issues.
Does a foreclosure wipe out an IRS lien?
If the IRS tax lien is junior to the mortgage being foreclosed, the IRS tax lien will be foreclosed through the judicial sale and the lien on the property will be extinguished after the judicial deed is issued.
Does a tax sale wipe out a mortgage in California?
In fact, California law provides that tax defaulted property sales do not extinguish liens or encumbrances on the property, including mortgages, unless the liens are specifically purchased at the sale.
What happens after a tax sale in PA?
You need to pay off the full amount of the purchase price at the tax sale plus 10% and other costs and expenses. You have nine months from the date of the Real Estate Tax Sale in Philadelphia to redeem the property. This is called a Philadelphia Tax Sale Redemption.
What is the disadvantage of a tax lien?
In short, a tax lien has a lot of negatives. It affects your ability to sell your property and limits the effectiveness of bankruptcy relief. It also hurts your ability to get credit and – through prospective employer credit checks – can even harm your chances of getting a new job.
Where do I record the sale of property on tax return?
Use Schedule D (Form 1040), Capital Gains and Losses and Form 8949, Sales and Other Dispositions of Capital Assets when required to report the home sale. Refer to Publication 523 for the rules on reporting your sale on your income tax return.