Naples Florida Short Sales - Will I be taxed for the forgiven debt from the short sale of my primary home? Naples Florida Short Sales expert Benjamin Sovacool offers some guidance.

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May 4, 2009, by Benjamin Sovacool in Short Sales

A common question I run across when talking with homeowners doing a short sale is "Will I be taxed for the forgiven debt from the short sale of my primary home?" The answer no.

When a mortgage company accepts a short sale part of the agreement is they will forgive the remaining debt. To be in compliance with IRS rules the lender is required to issue a Form 1099-C for the amount of forgiven debt. However, there is some good news. Back in December of 2007 a temporary tax relief measure was signed into law. The bill commonly referred to as "The Mortgage Cancellation Relief Act of 2007" eliminates the tax liability when the property being sold is a primary residence of the tax payer.. This does not apply to properties held as investments.

If you would like more information on short sales or need a qualified short sale expert in your area please contact me via my website dedicated to Naples Florida Short Sales by clicking the link. You can also contact me via the form at the bottom of the blog.

Your Naples Florida Short Sales Expert,

Benjamin Sovacool