Back in 2011 I short sold an investment property to GMAC due to a financial nightmare.
I received a deed of release from GMAC mortgage, I know owe taxes due and other fines. I never realized that the property would remain in my name as confirmed by GMAC.
What is the best way to sell this property? I paid $55,000 for it, willing to let it go for $5k at this point. Is this doable? I assume a normal agent wouldn’t work with me right?
Am I understanding this you sold a property to GMAC? Or you were the seller and GMAC allowed you to short sale the property to another buyer?
I believe your telling us the house is sold but you now received a tax bill for some percentage of the forgiven portion of the short sale? If this is correct then the house is sold and has been recorded to the new buyer.
But what’s happening is your being taxed because the approved shortage is income and I am guessing this must be in the last couple of years because there was tax amnesty available as a temporary provision back 3 to 6 years ago but I am sure it expired.
So if you receive $10k for example as a short sale benefit then they 1099 you and you owe either taxes as earned income or capital gains and since I am not an accountant I am hoping one of the accounting guys steps in and finishes giving you information.
The mortgage debt relief provisions for homeowners in the federal tax code, first enacted in 2007, expired at midnight on December 31, 2012. But the fiscal cliff bill enacted at the 13th hour by the Congress extended the relief through the end of 2013.
Just because you received a 1099 from the bank did not mean that you needed to declare the income. I would consult with a CPA about amending your return to not show the forgiven debt as income.