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Will we pay taxes on a short sale?
We finalized a short sale with Bank of America in January 2012. Included in the paperwork from the bank was a letter that indicated the lender is waiving the right to pursue collection of any deficiency following the completion of the sale. I was told we would need to receive a 1099 c form to complete our taxes and BOA is sending us a form. I thought up until 2013, the forgiven debt of a short sale wasn't considered income. Can someone please clarify? Oh, and we live in Michigan.
2 Answers
- Max HooplaLv 78 years agoFavorite Answer
Maybe. If this was your personal residence you may qualify for an exclusion. Have a pro do the figuring.
- Anonymous8 years ago
If the loan is non-recourse, it's part of the sale, not cancelled debt income.
Don't do anything until you get the forms.
