2007-11-10 05:05:56 · 3 answers · asked by Tony S 1 in Business & Finance ➔ Renting & Real Estate
No, it isn't. There are two considerations. Gain on the sale and Cancellation of Debt Income.
A foreclosure or short sale is no different than any other sale as far as calculating gain on the sale and any resulting taxes are concerned. It's entirely possible to have a taxable gain on a short sale even before looking at the COD income issue.
Once the sale itself is addressed, any debt forgiven as part of a recourse mortgage is considered taxable income to you. Unless you are insolvent at the time of the COD, you will have to pay tax on the COD as if it were ordinary income.
2007-11-10 05:38:04 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Only one other thing to add...Congress is now considering eliminating the deficiency tax if your short sale results in your the lender receiving less than what you owe on the mortgage. Current law says that you could receive a 1099c for the difference. Hopefully, they approve this because some see the current law as hitting someone further when they are already down.
2007-11-10 07:50:40 · answer #2 · answered by Christiane 3 · 0⤊ 0⤋
No. See above.
2007-11-10 05:53:03 · answer #3 · answered by godged 7 · 0⤊ 0⤋