Posted on: 29th Jul, 2008 09:11 pm
I have a builder who is going to have to short sale a project of town homes and is concerned about the potential tax liability. Is this going to really happen, he is into units approx 170k short sale for 80k and current market is about 140k a unit...I have a buyer that is ready to close on 8 units but the builder is dragging his feet!!! Help
Hi aloanmason .
Welcome to the forum.
After Short sale if the lender forgives the deficient amount then you are liable to pay the tax on that forgiven amount. But because of the Mortgage Debt Forgiveness Act you can get relief from the tax. BTW consult this with an attorney whether you can get tax relief on the forgiven debt or not.
Best of luck,
Larry
Welcome to the forum.
After Short sale if the lender forgives the deficient amount then you are liable to pay the tax on that forgiven amount. But because of the Mortgage Debt Forgiveness Act you can get relief from the tax. BTW consult this with an attorney whether you can get tax relief on the forgiven debt or not.
Best of luck,
Larry