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What are the tax ramifications to the homeowner for a Short Sale?

April 26, 2017Homeowner ramifications sale short tax

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What are the tax ramifications to the homeowner for a Short Sale?

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The difference between the mortgage balance and the discounted amount is considered to be “forgiveness of debt” by the IRS. This means the homeowner will receive a 1099 at the end of the year which they will need to report on their tax return as income.