Was having dinner at a friends place saturday and the conversation veered towards the one thing at all conversations veer towards these days..
Yes. Note that down..
All party conversations lead to the Bailout!
The probability of this happening is actually higher than all roads leading to Rome.
A tax accountant there answered my question "so what does happen to the bad guys? Do they go free?"
He said "Lets say the guy bought a house for 400k with 10k down, which he should not have in the first place and lets also say that the house is now worth 200k, if his loan is forgiven to an extent of 200k, not only does he lose his 10k, he gets a 1099 from the IRS for the forgiven 200k on which he has to pay taxes!"
This, made me happy for all of 10 minutes.
While driving back home, I was just thinking... wait a second.. The guy declared bankruptcy? So how is he going to pay taxes?
Also he is supposed to be a credit risk and this is supposed to make it difficult for him to borrow going forward and make me, a five-star borrower?
He is going to go to the same banker who gave him that 390k loan and get himself some more money?
No?
Let me know....
ps. A corollary to Bob Dylan singing "when you got nothing, you got nothing to lose" is "when you are bankrupt, you got no taxes to pay"...
.