Are There Any Tax Consequences When Short Selling?
We are not CPA’s or attorneys, please consult with one if you have questions. This information is not legal advice, but is for informational purposes. A foreclosure will remain on your credit report for years to come. Any loan application you fill out asks you if you have had a bankruptcy or foreclosure in the past 7 years. In a short sale transaction, your debt to the lender is shown as being paid and settled for an amount less than owed. The bank can seek a deficiency judgment for the shortage on the actual amount received versus the amount that was due. They can also give you a 1099 to show their loss as your income. Capital gains rules may apply to this gain if the property was your primary residence. Our loss mitigation specialists will work with your lender to waive it’s rights to seek a deficiency judgment. See the Mortgage Forgiveness Debt Relief Act. Who Qualifies for a Short Sale? We can help anyone who has suffered a hardship and is facing a foreclosure, but can’t sell their
