Posted on: 23rd Jan, 2007 01:25 pm
i am trying to sell my house on a short sale.
what are the financial consequenses of doing so.
i am conserned about taxes, and balances. am i responsible for them if the bank agrees to the short sale?
what are the financial consequenses of doing so.
i am conserned about taxes, and balances. am i responsible for them if the bank agrees to the short sale?
Hi rjs,
The main issues i see with the short sale is that most banks require you to cover any loss they may have. The amount of the short sale will be your responsabilty and attached to your other assets or become a collection debt.
Also speak to your tax consultant as many times the IRS looks at short sales as income to you and will be taxed.
I hope that helps
Tony g
The main issues i see with the short sale is that most banks require you to cover any loss they may have. The amount of the short sale will be your responsabilty and attached to your other assets or become a collection debt.
Also speak to your tax consultant as many times the IRS looks at short sales as income to you and will be taxed.
I hope that helps
Tony g
Welcome Rjs.
Once you negotiate with the lender for a short sale, the agreed upon price is the payment in full. But you may till owe the difference between the loan balance and the discounted sale price. A kind of judment is given by court in this regard. This is the deficiency judgment. This kind of judgment can affect your credit score as it is displayed as negative item in your credit report.
In order to avoid this judgment from being reported, you should convince the lender to agree to payment in full without any judgment. But if you do have to pay the deficiency, then it will be declared as income on your tax return form 1099 and you will be taxed for the income.
Thanks.
Once you negotiate with the lender for a short sale, the agreed upon price is the payment in full. But you may till owe the difference between the loan balance and the discounted sale price. A kind of judment is given by court in this regard. This is the deficiency judgment. This kind of judgment can affect your credit score as it is displayed as negative item in your credit report.
In order to avoid this judgment from being reported, you should convince the lender to agree to payment in full without any judgment. But if you do have to pay the deficiency, then it will be declared as income on your tax return form 1099 and you will be taxed for the income.
Thanks.
