Home Selling in 92277>Question Details

psregina08, Home Seller in Twentynine Palms, CA

With short sale do I get 1099 from The Bank. QUESTION: If I receive 1099 DO I OWE IRS TAXES LOST DIFFERENCE AMOUNT. Thanks Michele

Asked by psregina08, Twentynine Palms, CA Tue Sep 4, 2012

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Michele....if the sale closes before 12/31/2012 AND is was occupied as your primary residence you would not owe tax on the sale.....the mortgage debt relief act is set to expire at the end of this year, and if not extended would certainly change things!! yes, you will receive a 1099 on the sale, and it is reported for tax purposes....best to check with your accountant to be sure of the tax implications
0 votes Thank Flag Link Sat Sep 8, 2012
You will most likely get a 1099 from the bank but as long as the escrow closes before December 31, 2012 (assuming the tax relief isn't extended by the ongoing legislative debate to do so), your CPA will most likely say to you that it will not be deemed a taxable income though ordinarily any discharge of debt is an indirect taxable income
0 votes Thank Flag Link Sat Sep 8, 2012
The Mortgage Debt Relief Act changed how and who owes taxes from a short sale. Your CPA is the only professional qualified to advise you on your particular situation.
0 votes Thank Flag Link Sat Sep 8, 2012
Yes, you will get a 1099. As for the other half of the equation, only your accountant knows for sure - talk to them right away.
0 votes Thank Flag Link Wed Sep 5, 2012
You may or may not owe taxes on the 1099 amount. You may be exempt from taxes by the Mortgage Debt Relief Act. It is best to consult a tax professional.
Good luck,
0 votes Thank Flag Link Tue Sep 4, 2012
not necessarily... for example if you are insolvent you would not owe. You need to check with your tax person for help here. If you don't have one this may be a good year to hire someone.
0 votes Thank Flag Link Tue Sep 4, 2012
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