Are There Any Tax Issues to a Short Sale?

One of the most common questions I get from Arizona homeowners thinking of doing a short sale is: “Are There Any Tax Ramifications to a Short Sale?”

Myth: If I foreclosure I won’t get a 1099. That is a myth. You will get a 1099 no matter if you foreclose or short sale.

Keep in mind that with a foreclosure your 1099 will be greater.

Finally, keep in mind that through 2012 you have no tax liabilities if you short sell your primary residence.

http://www.irs.gov/individuals/article/0,,id=179414,00.html

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