Foreclosure University Forum

short sale tax liability to seller

by rad, Monday, February 07, 2005, 09:46 (5251 days ago) @ idahosoud

several years ago i had property go back to the lender..my debt was
150K...
the back accepted an offer from an investor for 125K ...the following
January i rec'd a form >>> 1099
from the bank showing a "charge off
of 25K ..which is treated as ordinary
income...i was'nt expecting this....

Now fast forward to now.. i have a deal
working to get a short sale accepted
to save this seller from foreclosure
and give him a little moving cash...
Seller thinks all is well and i'm a
great guy till next Jan. when he
gets a 1099 for income he's never seen..

QUESTION>>...do i tell him in writing up front that there could be tax
liabilities and risk the chance of

losing the deal>>>>


Suggestions >> comments>>
deal...


This is a common concern for most investors, however there is a solution. There is a form the IRS puts out that counter acts a 1099. You can find it on www.irs.gov. It is form 982. Yes, you should always disclose to the seller the risks involved, but your main concern is a deficiency judgment now.

You need to read the Short Sale Secrets ebook that I have, it would help you tons...


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