To: gleeaikin
I have a friend who is contemplating a short sale. How much will this affect his credit?
Do a short sale and the IRS will eat you up! You walk into the doors of hell when you do so simply because you will then be reported by the lender to the IRS stating the difference of the balance of the note vs the amount already paid...and guess what......it becomes ORDINARY INCOME on that year’s tax return.
Most people are unaware of this little jewel.
25 posted on
05/09/2011 3:45:21 AM PDT by
DH
(When the tainted finger of government touches anything, the rot begins!)
To: DH; gleeaikin
Are you sure about that? We had to do a short-sale in 2007 and last year when my accountant did my taxes, he stated the end of 2007 Congress [Schmucky Schumer - my insert] changed the laws so if primary residence was the one that was short-sold and difference was less than $500K then the forgiven debt wasn't taxable income.
Check on this with your CPA.
To: DH
“Most people are unaware of this little jewel.”
Except that if the person can show they were broke when they defaulted they do not pay any taxes on that income. Basically, every qualifies.
45 posted on
05/09/2011 8:04:57 AM PDT by
CodeToad
(Islam needs to be banned in the US and treated as a criminal enterprise.)
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