Follow Me On Pinterest
As a Sacramento Realtor ® I am can not give tax advice but I sure can tell you what looms over anyone in California who lists their home or condo as a Short Sale.
The Federal Government forgives the homeowner who sells their home as a Short Sale under certain conditions and the Lender does NOT issue a 1099 to report as income on your Federal Tax Return. But it’s important to know if you are exempt by asking your tax consultant.
My best advice is to call a Real Estate attorney next. A Short Sale is not always best for everyone. Your tax consultant and an attorney can give you the best advice for your circumstances.
However, California did NOT adopt the same rule. Some homeowners who have completed a Short Sale will be issued a 1099 by the Mortgage Lender for the difference between what was owed the bank and what you sold the house for. This means tax consequences.
Now, on Thursday, March 11, 2010 the California Senate voted 25 to 15 in favor of doing away with this State tax and forgiving the Short Sale homeowner of tax implications. The kicker here is that Governor Schwarzenegger would need to sign this into law and it appears that it is highly unlikely that he will do that.
It would seem that you can’t get blood from a turnip but I guess we will have a lot of California residents owing back taxes for a very long time if the Governor doesn”t sign this Bill. I realize that our State is in bad financial straits but is this going to help the State coffer aon the backs of those who already have lost their homes?
Other Short Sale Articles:
Short Sales Are The Wild Wild West
Sacramento News Release: Gena Riede Earns CDPE- to help Sellers Under Water
