Posted by William Bronchick on December 20, 2007 at 13:54:06:
There’s a bill pending in Congress that would eliminate the tax consequence of a short sale to the borrower. This is likely to pass in light of recent actions by the Govt to help people in foreclosure.
tax consequences of short sales - Posted by Angela Boudro
Posted by Angela Boudro on December 16, 2007 at 17:50:29:
We were told that the seller in a short sale has to pay taxes on the difference between his loan amount and the amount paid in a short sale. Can anyone comment on this? We work in Oregon.
Re: tax consequences of short sales - Posted by River City
Posted by River City on December 20, 2007 at 05:36:44:
That’s usually the way it goes. Look at it like the lender has given the borrower a gift of money, the difference in what they owe on the loan and the amount received from the short sale. Why don’t you ask the lender how this is handled? You might also call the IRS and ask them what happens if the seller fails to pay the taxes. You can also go to the IRS website and send them an email. They are usually good at responding to their emails as long as you ask a clear question. Be specific or they will not know how to respond.