This question was posted to Trulia
If I sell my home as a short sale at it's appraised value, do I pay taxes on the amount short, what they "forgive" for the loan?
My Answer to If I sell my home as a short sale at it's appraised value, do I pay taxes on the amount short, what they "forgive" for the loan?
That is a tax question and should be addressed to the person who will be filing your taxes. If that is you, you can call the IRS or even a local H & R Block type of place.
With that being said, when you speak with a professional tax person reference the "Mortgage Forgiveness Debt Relief Act" enacted on December 20, 2007 and has been extended through 2012. You can also find the article and the information on the official IRS site, I've put the link down below here. The IRS form for it is Form 982 and must be attached to your tax return.
Good luck to you! Mortgage Forgiveness Debt Relief Act
Good luck to you! Mortgage Forgiveness Debt Relief Act
I Was Disappointed however to see that many real estate agents forgot that they are not accountants and indeed gave specific answers on whether or not this person would have to pay taxes on the amount short, what was 'forgiven' for the loan from the short sale.
While the answers given may have been correct for their particular client at that time, the answer to If I sell my home as a short sale at it's appraised value, do I pay taxes on the amount short, what they "forgive" for the loan? may not be correct for this person.
Each person has their own set of circumstances and only a professional tax expert can answer the question If I sell my home as a short sale at it's appraised value, do I pay taxes on the amount short, what they "forgive" for the loan?
As real estate agents we see many things through our vast and various experiences, however answering questions like
If I sell my home as a short sale at it's appraised value, do I pay taxes on the amount short, what they "forgive" for the loan?
could actually hurt those people that we think we are helping.
It is my humble opinion that when we see a question such as
If I sell my home as a short sale at it's appraised value, do I pay taxes on the amount short, what they "forgive" for the loan?
we are providing a much better service to our clients and home selling community by referring them to a professional who can truly serve their needs. And as an added benefit, we gain much by building professional relationships.
For me personally, I want to be the real estate agent people can turn to to point them in the right direction - I see myself as a connector. I know what I do best and sometimes the best thing is to refer them to other professionals.
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