In a short pay in California, is the homeowner liable on income taxes for the difference between the
loan
balance and the final sale price since it is not a defaulted loan (as in a foreclosure where they cannot come after you for any shortage)?
That depends on whether or not the lender issues you a 1099-C. Also, depending on the state law, you may be liable for state and federal income taxes or just federal. Please consult your tax advisor.
Hello Diane,
There are a few variables to consider when answering this question. If you live in California. If this home is your primary residence. Please see Pam's article below as I think this is the best answer to your question. If you need a refferal to a tax advisor, let me know.
Best,
Monique Carrabba
The Reavis Group
Keller Williams Wilshire
Realtor and Eco Broker
mcarrabba@kw.com
Diane: It is best when asking about tax issues to consult your tax advisor for this information. The attached article was recently released to Realtors regarding legislation that has been passed. Good luck with your transaction.
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