As I originally discussed on February 13th, here, short sales, or attempts for them are becoming all the more common as homes are not able to sell for what is owed on them. I'm beginning to see lenders now realize this and approve them easier, but still far from easily. However, despite the ability to sell the home now and relieve yourself of the debt of the home payment you need to be aware that you may have tax liability for the money that was forgiven.
For many people however, a little tax next year is far better than the crushing mortgage debt this year.
Bob Bruss, a frequent columnist and radio spokesperson on real estate has this article on the 1099 that the lender should send for the debt that was forgiven so that you remember to pay the tax on it the following year.
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