Archive for the ‘Abandonment’ Category

Tax Responsibility With Short Sales

Saturday, March 19th, 2011

Hello. Thanks for stopping to view our video. I am Mark Alan Adams, owner of the Mark Alan Adams team. We are Orlando’s premier short sale team. Today we wanted to offer you some data regarding taxes and short sales. Before we go to far, let me tell you that we are not CPA’s or certified to offer tax guidance in any way. Thus, please remember that as we chat with you today.

One of the main questions we receive from Orlando potential clients is about tax responsibility with a Orlando short sale. Orlando area homeowners want to know if they are going to get taxed on the difference between what the house sells for and what they owe the lender. The straightforward answer is yes. You will be given a 1099 tax form from your bank. A lot of potential short sale clients believe that they should simply let the property go to foreclosure so that they don’t get taxed for it. This is incorrect information. You will receive a 1099 either way. There are 2 diverse kinds of 1099 forms.

There is a 1099a, which is meant for abandonment and a 1099c which is used for cancellation of debit. Either way you will be given a 1099. When you get a 1099, the first thing you need to do is take it to your accountant or tax pro. They will be familiar with what to do with it.

As far as paying the taxes, there are two alternatives to get around tax liability. The first tactic is with the Debt Relief Forgiveness Act of 2007. This undertaking relieves the majority of potential short sale clients from any tax liability. Remember that you do have to qualify for it. The second means is through insolvency. You can qualify for insolvency by going to the IRS website search for form 982. Download that form and fill it out. If you meet the criteria you will be relieved of any tax liability.

If you are now screening this video on our website, orlandoshortsaleexpert.info, you can download our free of charge short sale package. Even if you choose not to hire us to help with your Orlando short sale it has tons of excellent details regarding short sales and it’s free! Hopefully, we’ll be in touch shortly.

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