Originally posted by larryt
View Post
The "forgiven" amount in a short sale would not be taxable income if the mortgage was discharged in BK prior to the short sale. If you receive a 1099C you would file a form with your income tax return stating that the debt was discharged in BK and therefore excluded from taxable income.
You have no personal liability to pay a discharged mortgage. So, you would not have to pay the deficiency on a short sale.
From all reports, a short sale is a huge hassle for the seller with no benefit. Why not just let the lender foreclose and live in the house for free until title to the house is transferred to whoever buys the home at auction?
Leave a comment: