Posted on: 02nd Feb, 2010 08:49 pm
I just received a 1099C on a short sale for 460,000 in FL. Is there anyway to not have to claim this as income? If I could have paid the mortage I wouldn't have had to sell the property - but now I have to pay taxes on 460K. Any suggestions?
Hi Karlie,
If there was any deficiency from the short sale of the property and it was forgiven by the lender, you will have to pay taxes on this amount. How much was the deficiency for? $460k? You do not have to pay taxes on the entire loan amount. You will be liable for the taxes on the deficient amount.
You'd have been able to claim exemption from the taxes on the deficiency if the property had been your primary residence. But since the property is an investment property, you cannot claim exemption from paying taxes.
If there was any deficiency from the short sale of the property and it was forgiven by the lender, you will have to pay taxes on this amount. How much was the deficiency for? $460k? You do not have to pay taxes on the entire loan amount. You will be liable for the taxes on the deficient amount.
You'd have been able to claim exemption from the taxes on the deficiency if the property had been your primary residence. But since the property is an investment property, you cannot claim exemption from paying taxes.