Internal Revenue Service-Taxing on Short Sales
On March 27th I wrote a blog piece on how you may be liable for taxes on a loan that is partially forgiven as part of a short sale. Now, I have found an article that details this, but takes a hard approach toward the IRS. This is nothing new for the IRS, they have always taxed forgiven debt--just ask anyone who has ever settled a 
credit card for less than full value. The following year they received or should have received a 1099 making the forgiven portion income.
Despite this, remember that paying a portion, 15-25%, on the debt next year is very likely better than paying the whole debt this year and losing even more on double mortgage payments if you just haven't been able to sell the "old" house after you had to move for an employment transfer.
Tags: Attorney, Christopher Sevick, Estate Plan, Real Estate, Trust, Will, Ypsilanti, www.SevickLaw.com, Ann Arbor, www.MIEstatePlanBlog.com, www.MIRealEstateBlog.com, Washtenaw, Michigan
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