Form 982 and short sale taxes

Form 982 300x253 Form 982 and short sale taxes
Form 892 – and Loan Forgiveness Income

Even if you or we already know the answer…
This is where you need to begin your analysis — form 982.

form 982 – mortgage debt forgiveness act

Things to Remember

1. Expiration… the Mortgage Debt Forgiveness acts (both FED and California) are scheduled to expire this year, so if you are considering a short sale or a foreclosure you may have to set up your plan and act fast, especially if you have recourse loans.
2. If you are not working with principle residences, you will have to consider other possible ways to exclude 1099 income.
3. If you have refinanced or taken cash out, in excess of your original debt, you may have to look for other ways to exclude your 1099 loan forgiveness income.
4. Speak to a lawyer about the effects of disputing the debt.
5. Consider the insolvency exclusion.
6. Consider Capital gains implications, few people do, but they should.
7. If you have rented out the property, you may have two different ways to exclude some or all of the 1099 income.
8. Don’t forget the California Franchise Tax Board.

If you have questions, post them below. If you are a client or prospective client send us an email. john@favoriterealestate.com

Comments

  1. Tanya says

    I’m seriously thinking about trying to do a short sale on my condo in Aliso Viejo.
    I am “underwater” by about $150,000. as I bought 6 yrs ago.
    I’m hoping to try and rent the condo back, so I don’t have to move.
    I’ve heard this is sometimes done. Where are you located ? And do you charge a fee up front for
    advice? I’m very serious and wish to retire in 2 years, but wont be able to afford these payments on a retirement income.
    Thanks so much, Your website is very helpful.
    Tanya

    • John McConnin says

      1. Our main office is in Carlsbad, but we also have an office in downtown San Diego. We are currently negotiating for space in Orange County and Temecula. However, I have Real Estate Agents in my brokerage who work all the way up to Santa Barbara.

      2. Most but not all loan servicers or lenders require the parties to state in writing that there are no agreements or deals between buyer and seller for seller to stay in the property. So make sure you work with an experienced agent who can show you your lenders buyer and seller “addendums” before you waste your time.

      3. I know there are many people who claim to be able to buy the note from the bank and then strike a deal with you directly…. but they are not telling you all the facts. Anyone who is making a “buy the note” claim… needs to show you some notes they have purchased in Orange County in the last 12 months. Otherwise you are just dealing with Realtor marketing hype. Note to anyone is buying notes in L.A. down. I have hundreds of potential clients for you… but you must show us notes you have purchased in So Cal in the last year.

      4. If you would like to discuss your options in more detail let us know. Thank you for the question.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title="" rel=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Anti-Spam Quiz: