Tax Exclusion on Short Sales, extended to end of 2014. As in two weeks!
My original post on this matter is here: Income Taxes & Foreclosures/Shortsales 12.21.2007.
See also January 2013’s, Income Taxes & Foreclosure/Short Sales 2013 Update
As you know the tax code had an “Exclusion from gross income of discharge of qualified principal residence indebtedness (Sec. 108)”
…in other words many home owners were not taxed for 1099C income received as a result of foreclosure/short sale. This exclusion expired 12.31.2103, well, it has been reinstated and extended to 12.31.2014. Good news for the short sale market.
UPDATE 12.24.2014 – Many questions as to when a real estate transaction must close. It must close in the year of 2014 to take advantage of this tax break. But see these other posts from the I.R.S. which are helpful for non-owner occupied short sale/foreclosure tax concerns.
Ten Facts about Mortgage Debt Forgiveness
IRS publication on how 1099 taxes are calculated, exempt, etc.
IRS explanation as to taxes resulting from Foreclosure and Debt Cancellation.
OTHER SHORT SALE POSTS
Addendum to Short Sale Listing 1.26.2010
Advance Fees Continued and the FTC 1.6.2011
Advance Fees – Short Sales – FTC II 5.4.2011
Charging for negotiating short sales/Negotiators 10.1.2010
Deficiency Judgments Nevada 4.27.2007
Foreclosure and the One Action Rule in Nevada 4.10.2007
HAMP the Federal Shortsale Program coming April 2010
Income Taxes & Foreclosures/Shortsales 12.21.2007
IRS PUBLICATIONS shortsales/foreclosures:
Ten Facts about Mortgage Debt Forgiveness
IRS publication on how 1099 taxes are calculated, exempt, etc.
IRS explanation as to taxes resulting from Foreclosure and Debt Cancellation.
Judicial Foreclosures (Short sales are looking more attractive..) 3.23.2012
Lender Short Sale Approval Addendum
Nevada Home Owner’s Bill of Rights (Foreclosure/Short Sale/Judicial Foreclosure)
Nevada Supreme Court Mandatory Mediation Program and How it Affects Shortsale
Seller Being Released From Liability Language in Shortsale
Seller Liability After Short Sale 4.20.2007
Short Sale Addendum to Purchase Agreement October 2010
Short Sales and Bankruptcy and Waiting Periods 10.5.2012
Short Sale – “Dual Tracking” and the Homeowner’s Bill of Rights in Nevada May 2013
Short Sale Junior Lien/Senior Liens Rights To Sue & Other Changes
Short Sale Wallet Size Answer Sheet
Questions? email me darren@dwelshlaw.com
Nevada Residential Real Property Law 
December 19, 2014 at 12:27 am
Darren
If a short sale is under contract in 2014, but is closing January 2015, will it be accepted as part of the Debt forgiveness extended till 12/31/2014.
Or does it need to close in 2014 in order to be accepted for the Debt Forgiveness extension?
December 24, 2014 at 2:19 pm
The close date must be within 2014.
February 3, 2015 at 12:59 pm
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