Feb
15
2009

Short Sales & 1099′s

Posted by Christian Chase under Legal

moneyIf you or someone you know avoided foreclosure by successfully negotiating a short sale in 2008, they may have recently received an IRS form 1099 for the difference between the sales price received and their previous mortgage balance – treating this amount as income to the previous owner.

The Mortgage Debt Relief Act of 2007 specifically addresses this, and was designed to relieve most sellers of the obligation to pay income tax on the amount forgiven, particularly if the property was a primary residence.

If someone you know has received a 1099 as a result of a short sale, we at Chase Real Estate encourage them to seek legal counsel or consult a tax professional to determine if the short sale in question is protected under this legislation.

Below is a link to the IRS page reflecting FAQ’s on this legislation:

http://www.irs.gov/individuals/article/0,,id=179414,00.html

This entry was posted on Sunday, February 15th, 2009 at 5:38 pm and is filed under Legal . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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