Short sale of home

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Short sale of home

Are you taxed on the forgiveness of
debt on a short sale?

Asked on August 16, 2016 under Real Estate Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Yes, you are. Legally and mathematically, being forgiven debt is the same as being paid that amount of money: for example, say you owe $10,000 and it is forgiven; you are now $10,000 better off; you effectively have $10,000 more than you had. That is the same as if you were paid $10,000.


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