anyone know if you get slammed with capital gains tax on short sales?
It depends on whether the subject property is “Owner Occupied” or a rental / Investment property.
I believe the federal government has suspended collecting taxes against owner occupied property. However I do not know how exactly states are handling taxes against these properties.
If the property is a rental / investment property it is subject to taxes both state and federal on 1099’s.
The question is how many lenders are actually sending 1099’s?
an investment property for whom? the owner? myself? investors on this board (myself included) are doing short sales for the quick flip. the issue is, is it treated differently since it’s a my main source of income.
It is capital gains, since you are your own business owner, you are exempt from normal withholdings and do not have to pay your self an employee pay check.
Speak to your accountant to verify your states ceiling for a change to dealer status under your state law.
ryanpal,
Are you talking about the income you earn by facilitating a short sale or the income earned by the owner of the property when a short sale is approved and the deficit is forgiven?
Sounds like its all regular income to me.