Taxes owed for seller after shortsale

Foreclosures, Short Sales, Tax Foreclosures
1

Question regarding taxes after the shortsale for the original homeowner.

I read a thread awhile back(now I cant find it) that said that the seller would owe taxes on the difference between the amount originally owed and the accepted shortsale amount. For example, original owed amount was 180 k, but bank accepted 120k- owner would have to pay taxes on the 60 k difference.

Now I understand that there is a way that the seller can avoid paying taxes on this.

Can somebody tell me what needs to be done to avoid the seller having to pay these taxes?

Thanks

Gregg
Tucson, AZ

2

I should put this in my signature…

IRS form 982

See an accountant, you can’t do it yourself

3

You da man…Ill have the seller see the accountant since I just got him out of foreclosure!