Will the IRS come after the difference if I short sell?
I am thinking about short selling my house. If I do, will the IRS 1099 me for the difference between what I owe and the sale price? Thank you.
Answered By: E. Ray Critchett, Zaino & Humphrey, LPA
Debt cancellation and/or "short sales" can result in significant tax consequences to the owner. Debt cancellation is typically taxed at the rates for ordinary income. Contact an attorney and/or a CPA for legal and tax advice before you sell on a short dale or go through a foreclosure. Do your tax planning ahead of time, before it is too late.
You may contact our office to schedule an appointment if you have further questions or if you need assistance with this issue.
Answer Applies to: Ohio
Replied: 9/7/2010
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
You may contact our office to schedule an appointment if you have further questions or if you need assistance with this issue.
Answer Applies to: Ohio
Replied: 9/7/2010
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
Answered By: Law Offices of James C. Bechler, A.P.C.
When you short-sell a house, it is the lender- not the IRS who will send you the 1099. It depends on your particular facts as to whether or not they will send you the 1099 and whether or not you will have to pay taxes on the debt forgiveness.
Answer Applies to: California
Replied: 8/21/2010
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
Answer Applies to: California
Replied: 8/21/2010
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
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