Friday, June 29, 2012

tax amount calculated incorrectly on HUD-1

A tax amount was calculated incorrectly on my hud-1 statement in my favor.  The settlement lawyer called me and requested that I pay the money back; which I believe I should.  However, there is no correction being made on my statement.  My question is:  Shouldn’t I get a corrected Hud-1 statement to show my true settlement cost.  Also is this even legal without a correction?

I would really appreciate an answer as I researched this and can’t find anything that covers this situation, I am being harassed at my job and receiving phone calls on my cell asking for the money.

I not really sure what’s the right thing to do.

Thank you,

Hi, L.  If the taxes that were incorrect impact the prorations on HUD-1 keep an eye on the 1099 if one is being issued to the IRS.  You want to be certain correct figures are given to the IRS.  Otherwise, I think you should expect a letter from the attorney explaining what happened and evidence to support the tax figures.  You are honorably correct that you need to make right an error but I wouldn't give money unless I had documentation for my records.  You can use the letter and evidence in addition to your HUD-1 statement as a formal record for your tax preparer.  These things are often resolved without redoing the HUD-1 statement.

Thanks for reading and sharing.  Hope this helps.  ;)


PS  Hmmm..not to confuse - when I mentioned the IRS 1099 I was presuming you were the seller.  If you were the buyer and you had a mortgage lender, then your mortgage lender needs to be part of the decision whether or not to create a corrected HUD-1. If they don't care, get that in writing - email is fine.  ;)

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