QUESTION
What are the tax consequences of a short sale if they forgive the difference?
Asked on Mar 22nd, 2013 on Foreclosures - Nevada
5 ANSWERS
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It depends on the type of debt. Talk to a CPA about the tax issues.
Answered on Mar 25th, 2013 at 12:47 AM
Nothing. They forgave the difference.
Answered on Mar 24th, 2013 at 9:11 PM
The answer is too complex for this forum. Here is a link to a good article. For others, just Google "tax consequences of short sale." http://articles.sun-sentinel.com/2012-01-04/business/sfl-short-sales-foreclosures-2013-20120103_1_short-sale-mortgage-debt-cancellation-of-debt-income
Answered on Mar 24th, 2013 at 6:12 PM
You will receive a 1099 and you will have to pay tax on the forgiveness.
Answered on Mar 24th, 2013 at 6:03 PM
Congress extended the relief act through 2013. Accordingly, there should be no tax consequences so long as the transaction occurs in 2013 and the property is your primary residence (not a rental, vacation home, business, etc.)
Answered on Mar 24th, 2013 at 5:50 PM