Does homeowner get tax from the lender after the short sales deal is done.
Not sure exactly what you’re asking, but I’ll give it a shot.
The lender usually has two options with the borrower in a shortsale situation. One, they can file for a deficiency judgement for the amount owed minus the sales price (example: loan: $100K, sale for $80K, judgement for $20K). Normally, the investor/buyer makes sure that they don’t choose this option (makes it part of the deal).
Two, they can forgive the debt, basically ‘giving’ the amount to the seller as a gift. In this case they’ll get a 1099 for the amount and may have to pay taxes against this amount. Under current tax law, they may not have to pay any taxes, but they should be adviced by a cpa.
Raj
I asked a guy JDS on this forum awhile back the same question
He says to have homeowner fill out a form 982 w/homeowner w/ a CPA.
More details if you do a search like short sale taxes on this forum