Short Sale - 1099-C
Date: Thu, 03/26/2009 - 14:41
Short Sale - 1099-C
I sold my house through a Short Sale Process in 2008. I bought the house in 1998 as my primary residence. In 2005 I bought a new home and put this home up for sale - of which it never sold. I intermittently had renters in there while trying to sell. But now I guess I am being told that I must claim the cancellation of debt monies as income since it was not my primary residence. Is there any loop holes or ways around this? This was never purchased as rental property. Help! I need some advice quick! Thanks!
Hi Meg, You used to be able to, provided the home was your pr
Hi Meg,
You used to be able to, provided the home was your primary residence for 2 out of the last 5 years, but the law changed effective Jan 1, 2009. Which means you may possibly get grandfathered in, not sure. You should check with a tax attorney.
The Mortgage Forgiveness Debt Relief Act of 2007 only covers your principal residence.
BUT, if you can prove you were insolvent, then there is your loophole.
That is unfortunate that you were forced to foreclose because of a bad market, which is now causing you even more headaches.
I'm hoping that someone with knowledge of tax law and real estate will step forward very soon.
chrys
