The Mortgage Forgiveness Debt Relief Act of 2007 allows most people to short sale their home and not owe any income taxes on the forgiven debt.
However, there are a few situations where a homeowner may still owe taxes after
a short sale.
According to the IRS's Website, here are the following situations where you may owe taxes after a short sale or foreclosure.
* If you are being forgiven of more than $2 Million on your principal
* If you are being forgiven of more than $1 Million on your principal residence
and you are a married person filing a separate return.
* If the debt being forgiven was from a refinance and the proceeds of the
refinance was not used to improve your residence.
(If you refinanced your house and used the money to improve your residence,
then you wouldn't be taxed on the forgiven debt. I would talk to an accountant
to get all the details before trying this strategy.)
* Forgiven debt on second homes and other properties that are not your primary
residence are not eligible for tax relief under this law.
There are other ways to get tax relief, but they are not covered under this
If you have any questions about a Short Sale, Please feel free to contact me by email at firstname.lastname@example.org or, if you prefer, you can call me at 770-875-4268.
Thanks for reading this, Bion Grady.
Bion is a Real Estate Agent at Maximum One Realty Greater Atlanta.
Bion Grady specializes in loan modification assistance and short sales in
Georgia. Loan Modification Help, Short Sales. Short Sale Realtor.
Copyright 2012 SFI Marketing Institute, LLC. All Rights Reserved.
Bion Grady, Maximum One Realty Greater Atlanta, and the Stop Foreclosure
Institute are not affiliated in any way, shape, or form with the government.
Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales.
This is not intended as legal, technical, or tax advice. Please speak with a
licensed professional before making any decision. Information is deemed
reliable but not guaranteed as of the date of writing.
The views expressed here are Bion's personal views and do not reflect the views
of Maximum One Realty Greater Atlanta.