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Tax Consequences Of Short Sale

bobabby profile photo
  • Sunday, March 21, 2004 @ 08:38 PM EST
  • 2 Comments
I hv bn told that when a short sale occurs the financial institution will issue a 1099 to the seller because their indebtedness has bn reduced, which constitutes "income" per irs regulations. Is this true? Thank you
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  • bgrossnickle
    bgrossnickle15th March, 2004
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    I have been told that the lender can either get a deficiency judgement for the difference or they can issue a 1099.

    If the approval letter says settlement in full they will not get a deficieny but can still issue a 1099.

    Brenda

  • bobabby
    bobabby21st March, 2004
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    thank you for yr reply. I've bn out of town and not checked the board. thanks

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