I will be short selling my rental unit soon, will i receive1099 from the IRS with the defficiency amount? Will i declare that as income?
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I will be short selling my rental unit soon, will i receive1099 from the IRS with the defficiency amount? Will i declare that as income?
Asked on June 15, 2009 under Real Estate Law, Florida
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
Essentially, being 1099'd means that the homeowner, after the short sale has been used successfully to stop foreclosure, will be responsible for paying the taxes on the amount of debt that the bank forgives. Taxes would only have to be paid on the amount forgiven, not on the contract price, final payoff amount, or foreclosure judgment.
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