[quote=geovil7]
With the new law, we’re told that we’re going to be dinged with a 1099 for a short sale or foreclosure after 12/31/12, so if we’re going to walk, we have to stop paying or organize a short sale soon.
[/quote]
There is a lot of misinformation out there about the 2007 Mortgage Forgiveness Debt Relief Act that is scheduled to expire at the end of this year. Some folks assume that they have to act to get relief before the act expires when they really don’t need to, and some folks assume they will get relief under the act when they won’t qualify. Certain parts of the real estate industry assume it applies to everyone when it does not.
For instance, cancellation of true non-recourse debt may be exempt from taxation without having to resort to the act at all. Cash out refinances where the cash was used for purposes other than improvement of the property may be a situation where little help will be provided by the act.
