Nobel Finance Sydney – Money Matters Newsfeed

By Cory Boatright

I was reading more about deficiency questions with short sales and I thought I would elaborate a little on the subject. When you get a lender to accept a short sale the amount of debt forgiven becomes a taxable event.

Example: Homeowner owes $250,000 on a house. The lender accepts $170,000 for it. The homeowner is responsible for paying taxes on the $80,000 forgiven amount.

First thing that is important to realize is this.

Not ALL states have the option to file/collect on a deficiency judgment You may want to do some studying or contact a Real Estate attorney to find out which states have the ability to file/collect on a deficiency judgment.

Second is this. The homeowner is typically facing this REGARDLESS of your involvement. For a better understanding of a deficiency judgment let’s define it.  {continued}

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