San Diego Short Sale Specialists | Tax / 1099C Ramifications

SanDiegoShortSale.TV | Tax Ramifications | 1099-C 1099-A

*We are not state certified tax experts. The information and examples provided below are for informational purposes only. We highly recommend that you contact the appropriate tax professional for more information regarding the short sale, deed-in-lieu-of-foreclosure or foreclosure.*

H.R. 3648 - Mortgage Forgiveness Debt Relief Act of 2007

The Mortgage and Forgiveness Debt Relief Act of 2007 was passed by Congress | The bill amends the IRS Code to exclude amounts attributed to the discharge of debt on a principal residence as income. This means that you may not be liable for any payments to the IRS after a distressed sale.

The bill will apply whether or not the property is a short sale, foreclosure, or deed in lieu of foreclosure or any other arrangement that relieves the borrower from the obligation to pay a portion of their debt on their primary residence.

Many homeowners do not realize that they may receive a tax bill (1099C or 1099A) from the IRS after a short sale or foreclosure. Make sure your sale falls under the regulations set forth in H.R. 3648.

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