Caveat: You must retain this home as your principal residence to remain tax free. This is an easy part of the puzzle to forget.
Don Mailey
RE/MAX Results
952-212-0968
Saturday, November 26, 2011
Tax Implications Of A Short Sale
Generally, the amount of debt forgiven by your lender(s) in a short sale transaction is currently not taxable. This will be the case until the end of 2012, due to The Mortgage Forgiveness Debt Relief Act of 2007. This exclusion will end--although it could be extended--with tax year 2012, so your short sale must be closed by December 31, 2012. Please review this IRS publication to determine if you would have a tax liability from conducting a short sale.
Caveat: You must retain this home as your principal residence to remain tax free. This is an easy part of the puzzle to forget.
Caveat: You must retain this home as your principal residence to remain tax free. This is an easy part of the puzzle to forget.
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