Posted on: 25th Jan, 2011 09:07 am
I sold my home in a short sale and the lender has sent me a 1098 which shows approximately 4500 in box 1. Since property was sold for less than what I owed should I be getting this form and shouldn't I also be receiving form 1099-S? Is my mortgage interest tax deductible even when a short sale occurs? I did make payments until 2 months prior to short sale. Any guidance would help.
Thanks
Thanks
Welcome Guest,
If the lender forgives the deficient balance resulting from the sale of the property, then you will receive the 1099c form. You won't have to pay the taxes, however, as the Mortgage Debt Relief Act is in vogue now. However, if the lender does not forgive the deficient balance, then you will be liable for paying off the dues.
If the lender forgives the deficient balance resulting from the sale of the property, then you will receive the 1099c form. You won't have to pay the taxes, however, as the Mortgage Debt Relief Act is in vogue now. However, if the lender does not forgive the deficient balance, then you will be liable for paying off the dues.
Unfortunately banks all around have lost a lot of money on forgiving the debt which caused Uncle Sam to want money on the loss, which is your gain, because before banks were forgiving the loss and uncle sam wasn't being paid so no one was happy with that. When you signed the docs on your short sale, was the bank going to forgive your debt?