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Short Sale Tax Question

Having a dispute with a tenant or landlord? Rental Law discussion

Short Sale Tax Question

Postby Laurian » Sat Dec 03, 2016 8:34 am

s About Taxes)/Short Sale Tax Advertisement Expert: Carole Dunton - 6/21/2010 Owe 68,000 on a Michigan rental/investment property, Short sold it for only 10,000. I anticipate getting a 1099-C later this year for forgiven debt of 58,000.  Any way to avoid having that as taxable income and owing a lot to the IRS?

Will a Form 982 help?

I haven't contacted my CPA yet because he's my uncle and I'm frankly, embarrassed. :(
Laurian
 
Posts: 56
Joined: Wed Jan 01, 2014 2:38 pm

Short Sale Tax Question

Postby Efrain » Thu Dec 08, 2016 4:31 am

Hi,

There is no way to avoid tax on the forgiven debt.  If it were your primary residence you would need to file a form 982.  If you are insolvent you could avoid tax on the amount of your insolvency.  Being insolvent means that you debts exceed your assets immediately before the short sale.

Regards,

Carole
Efrain
 
Posts: 35
Joined: Wed Apr 16, 2014 7:54 pm

Short Sale Tax Question

Postby Rhisiart » Fri Dec 16, 2016 12:51 pm

s About Taxes)/Short Sale Tax Advertisement Expert: Carole Dunton - 6/21/2010 Owe 68,000 on a Michigan rental/investment property, Short sold it for only 10,000. I anticipate getting a 1099-C later this year for forgiven debt of 58,000.  Any way to avoid having that as taxable income and owing a lot to the IRS?

Will a Form 982 help?

I haven't contacted my CPA yet because he's my uncle and I'm frankly, embarrassed. :(
Rhisiart
 
Posts: 47
Joined: Sat Jan 04, 2014 11:51 am


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