A Quiet Reminder: We are about 13 months away from the end of those tax breaks on the short sales of primary residences (up to $250K/single; up to $500k/married). If you are considering a short sale or foreclosure, you need to also consider the tax consequences as the tax benefits are set to expire in December 2012 unless extended.
Without this law in place, after your short sale is complete, your lender can 1099 you and the “forgiven” amount can be viewed by the IRS as income earned. The consequences – you get pushed into a new tax bracket and you will be responsible for paying taxes on the amount assessed in the 1099.
BEAT THE RUSH – Unless this tax law is extended, there will likely be a rush of people selling their homes in the next 8 to 10 months in order to ensure that they can take advantage of the tax breaks before December 31, 2012.
Don’t get caught in the rush. Contact me for a consultation regarding your options.
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