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Short Sellers -> Please confirm something for me.

By BayArea   Follow   Thu, 7 Jun 2012, 4:12pm   537 views   4 comments
In Oakland CA 94618   Watch (0)   Share   Quote   Permalink   Like   Dislike  

Once you short sell your property, is there any obligations you have in terms of paying income taxes on the amount that was essentially forgiven (ie: amount remaining on your loan minus the value of the asset that is changing hands at the time you short sale)?

Can someone please confirm?

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1. E-man Follow Befriend (31) 34 threads 2,549 comments San Jose, CA Premium

   1   5:14pm Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   How much is the FMV for your property now? How much are you currently under-watered? You can be under-watered by $100k and it's still not worth to short sale. Don't listen to ill advice & short sale for the wrong reason. As of now the debt forgiveness is set to expire by 12/31/2012. You still have to file it on your tax return, but you don't have to pay any taxes to the IRS. that's why they call it debt forgiveness. You're forgiven up to $1M for single & $2M for married couple. Since you're in CA, you're protected by the one action rule on your 1st loan. Also, if short sold, you're protected from deficiencies by California Sente Bills SB-931 & SB-458.

2. BayArea Follow Befriend (3) 50 threads 368 comments Oakland, CA

   2   7:59pm Thu 28 Jun 2012   Share   Quote   Permalink   Like   Dislike   E-man says Since you're in CA, you're protected by the one action rule on your 1st loan Does that apply to a refinance?

3. robertoaribas Follow Befriend (23) 55 threads 3,798 comments Scottsdale, AZ robertoaribas's website

   3   8:11pm Thu 28 Jun 2012   Share   Quote   Permalink   Like   Dislike   a shot sale isn't an "action on a loan" a trustee auction is. You should definitely get your short sale agreement reviewed by an attorney, to make sure you will have no deficiency afterwards.

4. E-man Follow Befriend (31) 34 threads 2,549 comments San Jose, CA Premium

   4   8:52pm Thu 28 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   BayArea says E-man says Since you're in CA, you're protected by the one action rule on your 1st loan Does that apply to a refinance? Refinance or not, it doesn't matter. You're in CA. You're protected by SB 931 & SB 458 if you decide to short sale. If you decide to let the bank foreclose, you're protected by the one action rule on your 1st loan, not your 2nd loan. So if you have 2 or more loans, short sale is the way to go.