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Short sales, 1099s, promissory notes and.......DUH!!!
Hi folks. Richard Zaretsky wrote a great post yesterday titled "Back to Basics...a Review on Short Sales". If you haven't read it please take a few minutes to do so. It is a very good perspective on Short Sales from an Attorney.
Richard's post brought up two very good points for me. Both were light bulb moments.
The first was the 1099 "thingie". Whether you receive a 1099, or not, has no bearing on whether you have income to declare. Well...duh!!! Why would it. All a 1099 does is reports the income to the IRS for you. If it's not done for you....it is still YOUR obligation to report it. A perfect example of this is the way Title Companies, at least in Florida, handle our commissions. They are not required to 1099 me for commissions paid....BUT...I still have to claim the income. So wouldn't the Seller have the same obligation? They certainly may not have to pay any taxes BUT they would still have to claim the income.
The second light bulb moment was the promissory note. Some lenders will require the Seller to sign a promissory note for all of the "short" or part of it. So my thought ... more

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