Hi there this is Shawn Polston of short sale and Keller Williams Southern Arizona and I’m hear to speak to you today about one of the widespread questions I receive. One of the first questions I get is, ‘will there be tax penalties if I do a short sale?” When a short sale is done you recieve a 1099-C tax type, which represents a cancelation of debt. If a house owner simply walks away or forecloses on their property they are going to recieve a 1099-A, which represents an abandonment of a safe property. Generally a 1099-A will end up costing you ten to forty % more than by filing a short sale and recieving a 1099-C. Due to this fact the amount of loss proven on a 1099-A shall be a lot higher. Most owners additionally should not conscious of the Mortgage Debt Forgiveness Act of 2007 which runs till the tip of 2012. This act is in place to present tax relief to a home-owner after ending a short sale. So as to qualify the property must be your main residence and the debt forgiveness must be less than $2 million dollars. Most property owners fall beneath these two basic tips which is why a short sale might be far more useful on your tax record. When considering your tax questions when shifting a distressed property it is also a good idea to talk with a tax professional who can have a greater understanding of your particular situation. I look ahead to answering some other questions you’ve in regards to the short sale course of and serving to you progress on from your distressed property. Thanks and have an incredible day.
Do you need to sell you home or are you underwater and can’t make your mortgage payments?Shawn Polston is Marana’s Top Short Sale Realtor-Avoid Foreclosure