How does it benifit a seller to short sale their home?

By
Real Estate Agent with Results Realty Services, LLC and Mossy Oak Townhomes

I've recently heard that if a home owner sells their home in a short sale they will be sent a 1099 tax document by the Federal goverment.  The home owners are selling the home for less than what is owed and the goverment considers the loss "income".  If you owe $140,000 and short sell for $100,000 you will be sent a 1099 for the income of $40,000. If the home is foreclosed on the same thing will happen, only difference is the seller is working to sell, they just walk away.  Under both situations your credit is ruined. How does one know what the best choice is? What is your view?

 

 

Comments (4)

Don Spera
CR Property Group, LLC - East York, PA
Serving York and Adams County, PA

Linda,

Very informative post, thanks for sharing.  Best wishes

Jun 04, 2010 05:49 PM
Lisa Ludlow Archer
Live Love Homes-Keller Williams, Charlotte, NC Ballantyne Area - Waxhaw, NC

Linda,

Check this out with the IRS. In my CE class yesterday our instructor said that this was part of the Federal Laws to help homeowners out and would not be charging this to consumers with money still owed.

Have a great year, blessings to you.

Lisa Archer aka Allstarmom3 *twitter

Jun 04, 2010 05:50 PM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

No charge for the seller's home but investments are different. 

Jun 04, 2010 06:28 PM
Linda Suidan
Results Realty Services, LLC and Mossy Oak Townhomes - Duluth, GA

Check out this website Short Sale Specialist Network:

http://www.theshortsaleguide.com/forum/topics/how-does-it-benifit-a-seller?xg_source=facebook

Mike attaced a pdf: Mortgage Debt Relief Act

Jun 06, 2010 09:19 AM