Tax Consequences On Short Sales
You need to be very careful with short sales and I think this article highlights all of the things that can go wrong. Many think that if you do a short sale on your primary residence you won’t get hit with a deficiency but some banks are sneaking them in there. The purpose of doing a short sale in this environment is to get rid of your over leveraged assets that implies a negative net worth, not get a 1099 for the amount the lender takes a hit on with your primary residence, and to be able to rebuild your credit and buy a home down the road since your credit report is supposed to show satisfied. Sometimes it won’t show satisfied if you are not careful.