Reader's Question:
My neighbor told me that if I short saled my home I will get taxed on the loss. Is that true?
Christian's Response:
Christian's Response:
First, kindly ask your neighbor what he does professionally for a living. If he's a doctor, advise him to stick to medicine. If he's a contractor advise him to stick with construction. Your neighbor is about 2 years behind on the times.
Your answer is: check with your CPA.
My answer to you is........I have yet to see it happen. President Bush signed into law the Mortgage Relief Act of 2007. This legislation would prevent a 1099 from being issued to any homeowner in a short sale transaction that was last used as a primary residence. That legislation applies on a federal level only.
I am neither an attorney nor a CPA. They would be better suited to answer your question based on your particular situation although I do think your neighbor may want to stick to his day job.
