Short Sale damages: CPA required

[Allan from Fallbrook]

[quote=johngaltgirl]I think I was too vague in my original post. We do not want to go the bankruptcy route, even if it papers out. Attorneys I can find, it’s the cpa’s that seem to be hiding. :)[/quote]

John: I don’t know where you are in North County, but check out Polito, Eppich in Vista. I’ve used them on several occasions for clients of mine (back when I was consulting) and they’re reliable and affordable.

[SK in CV]

If the short sale was your personal residence, and the debt was purchase money debt (your post leads me to believe otherwise), you have no taxable income. The Mortgage Forgiveness Debt Relief Act of 2007 made a temporary change in the law, to generally exclude personal residence debt relief from income. It does, however, reduce your tax basis in the property, so if you had significant cash out refi’s or a very low down payment, there may be some taxable capital gain. (the exclusion on personal residence capital gains not withstanding)

Additionally, forgiveness of debt is not taxable to the extent the taxpayer is insolvent. If your debts exceed your assets, after the forgiveness, you have no taxable income as a result of the forgiveness. This is without regards to whether you file for bankruptcy protection.

If it was investment property, it’s a whole different story. And if it’s investment property, you shouldn’t be soliciting advice on a blog. You should either know the answer or getting professional advice from someone who does. That would not include a real estate broker, or a agent, or even an experienced investor. Unless they also happen to be CPA’s or tax attorneys.

[SK in CV]

If the short sale was your personal residence, and the debt was purchase money debt (your post leads me to believe otherwise), you have no taxable income. The Mortgage Forgiveness Debt Relief Act of 2007 made a temporary change in the law, to generally exclude personal residence debt relief from income. It does, however, reduce your tax basis in the property, so if you had significant cash out refi’s or a very low down payment, there may be some taxable capital gain. (the exclusion on personal residence capital gains not withstanding)

Additionally, forgiveness of debt is not taxable to the extent the taxpayer is insolvent. If your debts exceed your assets, after the forgiveness, you have no taxable income as a result of the forgiveness. This is without regards to whether you file for bankruptcy protection.

If it was investment property, it’s a whole different story. And if it’s investment property, you shouldn’t be soliciting advice on a blog. You should either know the answer or getting professional advice from someone who does. That would not include a real estate broker, or a agent, or even an experienced investor. Unless they also happen to be CPA’s or tax attorneys.

[SK in CV]

If the short sale was your personal residence, and the debt was purchase money debt (your post leads me to believe otherwise), you have no taxable income. The Mortgage Forgiveness Debt Relief Act of 2007 made a temporary change in the law, to generally exclude personal residence debt relief from income. It does, however, reduce your tax basis in the property, so if you had significant cash out refi’s or a very low down payment, there may be some taxable capital gain. (the exclusion on personal residence capital gains not withstanding)

Additionally, forgiveness of debt is not taxable to the extent the taxpayer is insolvent. If your debts exceed your assets, after the forgiveness, you have no taxable income as a result of the forgiveness. This is without regards to whether you file for bankruptcy protection.

If it was investment property, it’s a whole different story. And if it’s investment property, you shouldn’t be soliciting advice on a blog. You should either know the answer or getting professional advice from someone who does. That would not include a real estate broker, or a agent, or even an experienced investor. Unless they also happen to be CPA’s or tax attorneys.

[SK in CV]

If the short sale was your personal residence, and the debt was purchase money debt (your post leads me to believe otherwise), you have no taxable income. The Mortgage Forgiveness Debt Relief Act of 2007 made a temporary change in the law, to generally exclude personal residence debt relief from income. It does, however, reduce your tax basis in the property, so if you had significant cash out refi’s or a very low down payment, there may be some taxable capital gain. (the exclusion on personal residence capital gains not withstanding)

Additionally, forgiveness of debt is not taxable to the extent the taxpayer is insolvent. If your debts exceed your assets, after the forgiveness, you have no taxable income as a result of the forgiveness. This is without regards to whether you file for bankruptcy protection.

If it was investment property, it’s a whole different story. And if it’s investment property, you shouldn’t be soliciting advice on a blog. You should either know the answer or getting professional advice from someone who does. That would not include a real estate broker, or a agent, or even an experienced investor. Unless they also happen to be CPA’s or tax attorneys.

[SK in CV]

If the short sale was your personal residence, and the debt was purchase money debt (your post leads me to believe otherwise), you have no taxable income. The Mortgage Forgiveness Debt Relief Act of 2007 made a temporary change in the law, to generally exclude personal residence debt relief from income. It does, however, reduce your tax basis in the property, so if you had significant cash out refi’s or a very low down payment, there may be some taxable capital gain. (the exclusion on personal residence capital gains not withstanding)

Additionally, forgiveness of debt is not taxable to the extent the taxpayer is insolvent. If your debts exceed your assets, after the forgiveness, you have no taxable income as a result of the forgiveness. This is without regards to whether you file for bankruptcy protection.

If it was investment property, it’s a whole different story. And if it’s investment property, you shouldn’t be soliciting advice on a blog. You should either know the answer or getting professional advice from someone who does. That would not include a real estate broker, or a agent, or even an experienced investor. Unless they also happen to be CPA’s or tax attorneys.

[ucodegen]

This year we clearly need a good CPA. We have no idea how to handle the “loss” or loan forgiveness 1099’s on these short sale agreements. It looks like the 2nd is trying to collect already (saw that coming… still scared out of my pajamas).

1) Keep your pajamas on — please
2) Loan loss forgiveness 1099s are not taxable up to 2012. http://www.irs.gov/newsroom/article/0,,id=174034,00.html Also see “SK in CV”‘s comment above.
3) Did the second 1099 you as well? You seemed to hint that there is more than one 1099. Is there a difference between what you owed on the second and the amount on the 1099? I am wondering if the note was sold off to a debt collector and the bank listed the delta as a loss/1099. A debt collector might go away if you pay them what they paid to buy a note plus a profit. I would strongly suggest an attorney when dealing with debt collectors. They are notoriously shady characters. I would suggest an attorney with experience in bankruptcies and debt collection. Unfortunately, I can’t recommend one.

I would also list each contact with them in a log: time/date and the gist of the discussion. If the debt collectors are getting abusive, this log becomes a useful tool in negotiating with them through an attorney.

[ucodegen]

This year we clearly need a good CPA. We have no idea how to handle the “loss” or loan forgiveness 1099’s on these short sale agreements. It looks like the 2nd is trying to collect already (saw that coming… still scared out of my pajamas).

1) Keep your pajamas on — please
2) Loan loss forgiveness 1099s are not taxable up to 2012. http://www.irs.gov/newsroom/article/0,,id=174034,00.html Also see “SK in CV”‘s comment above.
3) Did the second 1099 you as well? You seemed to hint that there is more than one 1099. Is there a difference between what you owed on the second and the amount on the 1099? I am wondering if the note was sold off to a debt collector and the bank listed the delta as a loss/1099. A debt collector might go away if you pay them what they paid to buy a note plus a profit. I would strongly suggest an attorney when dealing with debt collectors. They are notoriously shady characters. I would suggest an attorney with experience in bankruptcies and debt collection. Unfortunately, I can’t recommend one.

I would also list each contact with them in a log: time/date and the gist of the discussion. If the debt collectors are getting abusive, this log becomes a useful tool in negotiating with them through an attorney.

[ucodegen]

This year we clearly need a good CPA. We have no idea how to handle the “loss” or loan forgiveness 1099’s on these short sale agreements. It looks like the 2nd is trying to collect already (saw that coming… still scared out of my pajamas).

1) Keep your pajamas on — please
2) Loan loss forgiveness 1099s are not taxable up to 2012. http://www.irs.gov/newsroom/article/0,,id=174034,00.html Also see “SK in CV”‘s comment above.
3) Did the second 1099 you as well? You seemed to hint that there is more than one 1099. Is there a difference between what you owed on the second and the amount on the 1099? I am wondering if the note was sold off to a debt collector and the bank listed the delta as a loss/1099. A debt collector might go away if you pay them what they paid to buy a note plus a profit. I would strongly suggest an attorney when dealing with debt collectors. They are notoriously shady characters. I would suggest an attorney with experience in bankruptcies and debt collection. Unfortunately, I can’t recommend one.

I would also list each contact with them in a log: time/date and the gist of the discussion. If the debt collectors are getting abusive, this log becomes a useful tool in negotiating with them through an attorney.

[ucodegen]

This year we clearly need a good CPA. We have no idea how to handle the “loss” or loan forgiveness 1099’s on these short sale agreements. It looks like the 2nd is trying to collect already (saw that coming… still scared out of my pajamas).

1) Keep your pajamas on — please
2) Loan loss forgiveness 1099s are not taxable up to 2012. http://www.irs.gov/newsroom/article/0,,id=174034,00.html Also see “SK in CV”‘s comment above.
3) Did the second 1099 you as well? You seemed to hint that there is more than one 1099. Is there a difference between what you owed on the second and the amount on the 1099? I am wondering if the note was sold off to a debt collector and the bank listed the delta as a loss/1099. A debt collector might go away if you pay them what they paid to buy a note plus a profit. I would strongly suggest an attorney when dealing with debt collectors. They are notoriously shady characters. I would suggest an attorney with experience in bankruptcies and debt collection. Unfortunately, I can’t recommend one.

I would also list each contact with them in a log: time/date and the gist of the discussion. If the debt collectors are getting abusive, this log becomes a useful tool in negotiating with them through an attorney.

[ucodegen]

This year we clearly need a good CPA. We have no idea how to handle the “loss” or loan forgiveness 1099’s on these short sale agreements. It looks like the 2nd is trying to collect already (saw that coming… still scared out of my pajamas).

1) Keep your pajamas on — please
2) Loan loss forgiveness 1099s are not taxable up to 2012. http://www.irs.gov/newsroom/article/0,,id=174034,00.html Also see “SK in CV”‘s comment above.
3) Did the second 1099 you as well? You seemed to hint that there is more than one 1099. Is there a difference between what you owed on the second and the amount on the 1099? I am wondering if the note was sold off to a debt collector and the bank listed the delta as a loss/1099. A debt collector might go away if you pay them what they paid to buy a note plus a profit. I would strongly suggest an attorney when dealing with debt collectors. They are notoriously shady characters. I would suggest an attorney with experience in bankruptcies and debt collection. Unfortunately, I can’t recommend one.

I would also list each contact with them in a log: time/date and the gist of the discussion. If the debt collectors are getting abusive, this log becomes a useful tool in negotiating with them through an attorney.

[SD Realtor]

uco be careful on the loan loss forgiveness rules. There are certain stipulations to that loan loss that are borne upon the borrower.

[SD Realtor]

uco be careful on the loan loss forgiveness rules. There are certain stipulations to that loan loss that are borne upon the borrower.

[SD Realtor]

uco be careful on the loan loss forgiveness rules. There are certain stipulations to that loan loss that are borne upon the borrower.

[SD Realtor]

uco be careful on the loan loss forgiveness rules. There are certain stipulations to that loan loss that are borne upon the borrower.

[Author]

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