Question Details

Brett Dunne, Real Estate Pro in Upland, CA

Short Sale and 1099's

Asked by Brett Dunne, Upland, CA Tue Oct 30, 2007

How many of your short sale clients every received a 1099 form? (as a percentage). If small or none why do you think it was not reported?

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3
Hi Brett! You may have already read this but I thought I would share it with you. Gov't aid during this tough time, however little or great it may be.

New Federal Law Provides a Tax Break on Mortgage Debt Forgiveness (Under the Mortgage Forgiveness Debt Relief Act of 2007 a taxpayer does not have to pay federal income tax on debt forgiven for a loan secured by a qualified principal residence. This tax break applies to debts discharged from January 1, 2007 to December 31, 2009. Qualified principal residence indebtedness is debt incurred in acquiring, constructing, or substantially improving the residence (up to $2 million for refinances).)

Take care of you!! Diane
1 vote Thank Flag Link Sun Mar 30, 2008
It is my understanding the lenders are obligated to 1099 the borrowers. We know the title companies must 1099 at year end. Any particular reason you are asking?
0 votes Thank Flag Link Tue Oct 30, 2007
Pam Winterba…, Real Estate Pro in Danville, VA
MVP'08
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Hi Brett. I don't think the 1099 reporting by lenders is optional. If it were, we would not need legislation like the Mortgage Forgiveness Debt Relief Act. Since the 1099 is issued after the short sale is already completed, it's probably something that the listing agent does not find out about and it's difficult to keep track of something like that.
Web Reference: http://www.theMLShub.com
0 votes Thank Flag Link Tue Oct 30, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
MVP'08
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