I am working on a short sale on my home currently. I owe 266k on the home and the short sale offer will be around 200k or so. The appraisal was ordered and came in at 170k and am just waiting on the BPO. My quesiton is from what I have read I believe I will receive a 1099 for the difference of what I owe and what it sells for, although from one of the people I have talked with who has done a lot of these she said she has seen the 1099 issued and she has seen it done the other way as well. Is there any ways to avoid or lessen the tax risks? Thanks