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Thread: Why we pay taxes, who has to pay taxes, and redeeming lawful

  1. #21
    The following seems quite relevant or in parallel:

    Topic 431 - Canceled Debt – Is It Taxable or Not?
    A debt includes any indebtedness whether you are personally liable or liable only to the extent of the property securing the debt. Cancellation of all or part of a debt that is secured by property may occur because of a foreclosure, a repossession, a voluntary return of the property to the lender, abandonment of the property, or a principal residence loan modification.

    In general, if you are liable for a debt that is canceled, forgiven, or discharged, you will receive a Form 1099-C (PDF), Cancellation of Debt, and must include the canceled amount in gross income unless you meet an exclusion or exception. If you receive a Form 1099-C but the creditor is continuing to try to collect the debt, then the debt has not been cancelled and you do not have taxable cancellation of debt income.

    You must report any taxable amount of a cancelled debt for which you are personally liable, as ordinary income from the cancellation of debt, on Form 1040 (PDF) or Form 1040NR (PDF) and associated schedules, as advised in Publication 4681 (PDF), Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). You must report the taxable amount of a taxable debt whether or not you receive a Form 1099-C.

    Caution: If your debt is secured by property and that property is taken by the lender in full or partial satisfaction of your debt, you are treated as having sold that property and may have a taxable gain or loss. The gain or loss on such a deemed sale of your property is an issue separate from whether any cancellation of debt income associated with that same property is includable in gross income. See Publication 544, Sales and Other Dispositions of Assets, and Publication 523, Selling Your Home for detailed information on reporting gain or loss from repossession, foreclosure or abandonment of property.

    Canceled debts that meet the requirements for any of the following exceptions or exclusions are not taxable.

    Canceled Debt that Qualifies for EXCEPTION to Inclusion in Gross Income:
    Amounts specifically excluded from income by law such as gifts or bequests
    Cancellation of certain qualified student loans
    Canceled debt, that if paid by a cash basis taxpayer, would be deductible
    A qualified purchase price reduction given by a seller
    Any Pay-for-Performance Success Payments that reduce the principal balance of your home mortgage under the Home Affordable Modification Program
    Canceled Debt that Qualifies for EXCLUSION from Gross Income:
    Debt canceled in a Title 11 bankruptcy case
    Debt canceled during insolvency
    Cancellation of qualified farm indebtedness
    Cancellation of qualified real property business indebtedness
    Cancellation of qualified principal residence indebtedness
    The exclusion for "qualified principal residence indebtedness" provides tax relief on canceled debt for many homeowners involved in the mortgage foreclosure crisis currently affecting much of the United States. The exclusion allows taxpayers to exclude up to $2,000,000 ($1,000,000 if married filing separately) of "qualified principal residence indebtedness."

    Generally, if you exclude canceled debt from income under one of the exclusions listed above, you must reduce your positive tax attributes (certain credits, losses, basis of assets, etc.), within limits, by the amount excluded. You must file Form 982 (PDF), Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), to report the amount qualifying for exclusion and any corresponding reduction of certain tax attributes.

    If you received a Form 1099-C and the information is incorrect, contact the lender to make corrections. Refer to Publication 4681 (PDF), Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals), for more detailed information regarding taxability of canceled debt, how to report it, and related exceptions and exclusions. Additional information can also be found in Publication 525, Taxable and Nontaxable Income. If you received a Form 1099-A (PDF), Acquisition or Abandonment of Secured Property, review Topic 160 for additional information. [Source: IRS.]




    Notice the "Bank's position" on the payroll checks vs. on a personal check (below).



    payment (Act of paying), noun acquittal, acquittance, amortization, amortizement, clearance, compensation, defrayment, disbursement, discharge of a debt, liquidation, outlay, quittance, receipt in full, recompense, reimbursement, remittance, restitution, return, satisfaction, settlement, spending, subsidy
    Perhaps the significance is in whether you discharge or someone else does?

    Last edited by allodial; 10-01-13 at 06:43 AM.
    All rights reserved. Without prejudice. No liability assumed. No value assured.

    "The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius
    "It is the glory of God to conceal a thing: but the honour of kings is to search out a matter." Proverbs 25:2
    Prove all things; hold fast that which is good. Thess. 5:21.

  2. #22
    Quote Originally Posted by Goldi View Post
    Roads are paid by gasoline taxes, schools are paid by property taxes. Income taxes, according to the Grace Commission report cover letter are used to pay the interest on the US Debt and to transfer payments [social security, welfare, etc.] http://docs.law.gwu.edu/facweb/jsieg...taxes/debt.htm The only reason income taxes are still in place is to attempt to soak the buying power out of the pockets of the people to keep the sham of a monetary system afloat for as long as possible.
    It is articles like this that shows you that you are not the owner of your land and your just a tenent of the property if you don't pay the tax to live on it.

    So then who owns the land?

    Treasurer John Petalas said the Internet-driven sale collected that from 1,360 parcels from among a total of 9,000 properties whose owners failed to pay overdue taxes and special assessments. It also represents a bidding frenzy on a smaller amount of commercial sites. He said one property where the tax debt was $14,762 was sold at auction for more than $280,000, and a second property with an $81,000 tax debt sold for $541,000.

    Petalas said the $21.6 million figure includes $4.7 million in taxes and late penalties county, municipal and township government officials can keep
    (that must be nice, keep and do what with it).

    The remaining $16.8 million is the surplus value that will be paid either to the delinquent owners who lost their properties or back to the buyer with a small profit if the owner redeems the property by paying 10 percent of the successful bid.

    Petalas credited the success of the online auction conducted by SRI, Indianapolis-based auctioneer, which received bids around the clock from people across the country.

    http://www.nwitimes.com/news/local/l...2666704f5.html

  3. #23
    [QUOTE=Chex;11756]It is articles like this that shows you that you are not the owner of your land and your just a tenent of the property if you don't pay the tax to live on it.

    So then who owns the land? [QUOTE]

    When a property is mortgaged, the singular title on it, the land patent, has to be shelved so the title can be split. The legal title then goes to the occupant of the home, the "owner" and the equitable title is then available to be held by the county assessor/treasurer. When foreclosed, the bank gets the legal title to convey. Who gets the benefit of the profits, fees, rents, surpluses of investing the "res"? The equitable owner. Who pays the fees, fines, taxes? The legal owner. Isn't that what is going on with property taxes? The counties MUST hold an interest in the property to be able to bond it up. That's how they are doing it.

  4. #24
    Quote Originally Posted by Goldi View Post
    When a property is mortgaged, the singular title on it, the land patent, has to be shelved so the title can be split. The legal title then goes to the occupant of the home, the "owner" and the equitable title is then available to be held by the county assessor/treasurer. When foreclosed, the bank gets the legal title to convey. Who gets the benefit of the profits, fees, rents, surpluses of investing the "res"? The equitable owner. Who pays the fees, fines, taxes? The legal owner. Isn't that what is going on with property taxes? The counties MUST hold an interest in the property to be able to bond it up. That's how they are doing it.
    Interesting, thanks for that piece Goldi.

    Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest.

    The rights in the bundle may be separated and held by different parties. [That would be the township and you the owner.]

    It may also refer to a formal document such as a deed that serves as evidence of ownership.

    Conveyance of the document may be required in order to transfer ownership in the property to another person.

    Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it.

    In many cases, both possession and title may be transferred independently of each other.

    For real property, land registration and recording provide public notice of ownership information.

    In United States real estate law, typically evidence of title is established through title reports written up by title insurance companies, which show the history of title (property abstract and chain of title) as determined by the recorded public record deeds;

    [1] the title report will also show applicable encumbrances such as easements, liens, or covenants.

    [2] In exchange for insurance premiums, the title insurance company conducts a title search through public records and provides assurance of good title, reimbursing the insured if a dispute over the title arises.

    [3] In the case of vehicle ownership, a simple vehicle title document may be issued by a governmental agency.

    At common law equitable title is the right to obtain full ownership of property, where another maintains legal title to the property.

    [4] Legal title is actual ownership of the property. When a contract for the sale of land is executed, equitable title passes to the buyer.

    When the conditions on the sale contract have been met, legal title passes to the buyer in what is known as closing.

    Legal and equitable title also arises in trust.

    In a trust, one person may own the legal title, such as the trustees.

    Another may own the equitable title such as the beneficiary.

    http://en.wikipedia.org/wiki/Title_(property)

    So there must be a contract describing the terms and conditions when we purchase a building on a piece of property belonging to property abstract and chain of title owner.
    Last edited by Chex; 10-03-13 at 01:08 AM.

  5. #25
    Quote Originally Posted by Chex View Post
    So there must be a contract describing the terms and conditions when we purchase a building on a piece of property belonging to property abstract and chain of title owner.
    Tenancy in Common http://www.osbar.org/_docs/public/lioa/chapter6.pdf

    There are four types of deeds in Oregon and each transfers property differently.
    These are:
    • Warranty deed; (Common paperwork)
    • Special warranty deed;
    • Bargain and sale deed; and
    • Quitclaim deed.

    A warranty deed expressly warrants that title is good. This means that you will guarantee you own the entire property free and clear except for any conditions specifically listed in the deed.

    A special warranty deed is most often used in fulfillment of a land sale contract and is similar to a warranty deed except the person selling only warrants their own actions.

    There are a few practical matters you should know about completing a deed:

    • If the property is located in a subdivision, it must be legally described by lot and block numbers in the deed.

    • If the property is not in a subdivision, it must be described by a method called “metes and bounds” or by a sectional description. A tax lot number or street address is not enough.

    • The deed must state what was given or paid (called consideration) for the property; generally, the dollar amount paid for the property.

    If the property is a gift, the deed can say that the consideration is love and affection.

    • Never sign a deed someone else has prepared for you unless you know and understand the outcome.

    • The deed must be signed or acknowledged before a notary public.

    • Once a deed has been received or delivered, you must record it with the county clerk or recorder for the county where the property is located.

    All deeds, mortgages, contracts, and other writings about ownership interests in real property should be recorded.

    Recording protects the buyer and the seller. For instance, if you are the buyer, you could lose your title to the property if the deed is not recorded and the property is sold again by the same person who transferred it to you.

    An unrecorded deed could create problems with transferring the property in the future.

  6. #26
    Quote Originally Posted by Goldi View Post
    When a property is mortgaged, the singular title on it, the land patent, has to be shelved so the title can be split.
    Historically, when property was mortgaged, the title was transferred to the creditor. After complete settlement of the terms of the mortgage, the title was re-conveyed or redeemed by the debtor.

    Historically, the letters patent was issued by the king. This patent was not absolute ownership or dominion. A letters patent is still qualified ownership for their would be terms and conditions written into the patent for the benefit of the king.

    Quote Originally Posted by Goldi
    The legal title then goes to the occupant of the home, the "owner" and the equitable title is then available to be held by the county assessor/treasurer.
    I will agree that there is some interest which the county purports to have in the land and appurtenances thereon.
    The tenant, in most instances, will have legal and equitable interest in the property. There is some liability attached to the legal title upon tenure of such.

    Quote Originally Posted by Goldi
    When foreclosed, the bank gets the legal title to convey. Who gets the benefit of the profits, fees, rents, surpluses of investing the "res"? The equitable owner. Who pays the fees, fines, taxes? The legal owner. Isn't that what is going on with property taxes?
    With registration and mortgage, the property is treated as a registered investment.
    The presumption being that one is in commerce for profit and gain.

    Quote Originally Posted by Goldi
    The counties MUST hold an interest in the property to be able to bond it up. That's how they are doing it.
    Perhaps the counties purport to hold an interest, but no one bothers to research the law and challenge them on such claim?

  7. #27
    Quote Originally Posted by Chex View Post
    Tenancy in Common http://www.osbar.org/_docs/public/lioa/chapter6.pdf

    There are four types of deeds in Oregon and each transfers property differently.
    These are:
    • Warranty deed; (Common paperwork)
    • Special warranty deed;
    • Bargain and sale deed; and
    • Quitclaim deed.

    A warranty deed expressly warrants that title is good. This means that you will guarantee you own the entire property free and clear except for any conditions specifically listed in the deed.

    A special warranty deed is most often used in fulfillment of a land sale contract and is similar to a warranty deed except the person selling only warrants their own actions.

    There are a few practical matters you should know about completing a deed:

    • If the property is located in a subdivision, it must be legally described by lot and block numbers in the deed.

    • If the property is not in a subdivision, it must be described by a method called “metes and bounds” or by a sectional description. A tax lot number or street address is not enough.

    • The deed must state what was given or paid (called consideration) for the property; generally, the dollar amount paid for the property.

    If the property is a gift, the deed can say that the consideration is love and affection.

    • Never sign a deed someone else has prepared for you unless you know and understand the outcome.

    • The deed must be signed or acknowledged before a notary public.

    • Once a deed has been received or delivered, you must record it with the county clerk or recorder for the county where the property is located.

    All deeds, mortgages, contracts, and other writings about ownership interests in real property should be recorded.

    Recording protects the buyer and the seller. For instance, if you are the buyer, you could lose your title to the property if the deed is not recorded and the property is sold again by the same person who transferred it to you.

    An unrecorded deed could create problems with transferring the property in the future.
    All deeds are color of title.

    The original deed or first title deed is the land patent or land grant.

    Deeds color who the holder of the patent or grant is for the patent or grant shall be as is without modification.

  8. #28
    bobbinville
    Guest
    In Massachusetts, things are different in name but not in form. A "warranty deed" says that the seller will warrant and defend the buyer's title against adverse claims by others; but since most sellers do not want to, effectively insure the title on behalf of the buyer, most people use a "quitclaim deed", which in contrast to the use of those words in other states means that the seller will warrant and defend the title ONLY against issues which arose when she or he actually held title. This is exactly like the "special warranty" deed mentioned by shikamaru.

    The "bargain and sale" deed and "quitclaim deed" mentioned by shikamaru are called a "release deed" or a "deed without covenants" in Massachusetts. Since, in the normal course of business, no buyer of real estate would ever, in their right mind, accept such a deed, you will only see this kind of deed in a tax sale or foreclosure sale by a governmental entity or a foreclosing mortgagee. In this case, it is solely up to the buyer to review the title for at least the previous 50 years to see if any encumbrances or other title issues exist.

    I bought my house 30 years ago this month, using a quitclaim deed to my wife and I as tenants by the entirety. Just for fun, I ran the title as far back as I could, and got to 1688 before the trail ran dry. It turned out that the woman who sold the land then was the daughter and heir of a man who came over with the original 1630 Puritans, and who was given fee simple title to his land by the Crown.

  9. #29
    Quote Originally Posted by bobbinville View Post
    In Massachusetts, things are different in name but not in form. A "warranty deed" says that the seller will warrant and defend the buyer's title against adverse claims by others; but since most sellers do not want to, effectively insure the title on behalf of the buyer, most people use a "quitclaim deed", which in contrast to the use of those words in other states means that the seller will warrant and defend the title ONLY against issues which arose when she or he actually held title. This is exactly like the "special warranty" deed mentioned by shikamaru.

    The "bargain and sale" deed and "quitclaim deed" mentioned by shikamaru are called a "release deed" or a "deed without covenants" in Massachusetts. Since, in the normal course of business, no buyer of real estate would ever, in their right mind, accept such a deed, you will only see this kind of deed in a tax sale or foreclosure sale by a governmental entity or a foreclosing mortgagee. In this case, it is solely up to the buyer to review the title for at least the previous 50 years to see if any encumbrances or other title issues exist.

    I bought my house 30 years ago this month, using a quitclaim deed to my wife and I as tenants by the entirety. Just for fun, I ran the title as far back as I could, and got to 1688 before the trail ran dry. It turned out that the woman who sold the land then was the daughter and heir of a man who came over with the original 1630 Puritans, and who was given fee simple title to his land by the Crown.
    Small correction: Chex enumerated the list of varying types of deeds.

  10. #30
    bobbinville
    Guest
    Thanks! My aging eyes passed right over that....

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