If we short sale our home in Nevada what would be the tax consequences?
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If we short sale our home in Nevada what would be the tax consequences?
How bad would the effect be on our credit (FICO)?
Asked on December 30, 2012 under Real Estate Law, Nevada
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
1) If the short sale is with bank approval--that is, it accepts the proceeds of the short sale as payment in full of your loan and does not seek the remaining balance for you--the difference between the amount you owe and the net amount (after broker fees, etc. if any) you receive from the sale is considered income to you; you would pay income tax on that difference.
2) Impact on credit--the credit rating agencies do not publish their formulas. Conventional wisdom is a short sale impacts your credit score by the equivalent of 100 - 200 points, but there is no way to state that definitively.
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