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Direct line : 602 405 8156

When is the right time to consider Arizona Short Sale

The most opportune time to consider an Arizona short sale is when the homeowner is faced with owing more money on the home in loan balance(s) than what the property is actually worth. Many times the...

Why Would a Bank Say Yes?

With foreclosures on the rise in the US, banks are looking for any way they can to minimize their foreclosure losses. Basically, it is much more cost effective for a bank to agree to a...

Do You Know the Required Items for an Arizona Short Sale Packet?

When it comes to an Arizona short sale, the only reason your lender permits a short sale is to avoid the high cost of taking over your property in the foreclosure process. Conducted properly, an Arizona...

What is an Arizona short sale?

A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property. In addition, the property owner...

What About Taxes after Arizona Short Sale?

There may be tax ramifications to a Short Sale but every situation is unique. You may have heard, “Don’t do a short sale because you will get a 1099 and have to pay taxes on the difference between what you owed on your home and what you sold it for or the amount the bank wrote off.” This may be true, but this is not the whole story.

If you borrow money from a lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender.

When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.

The thing that most people don’t know or don’t tell you is that with a Foreclosure, you will also get a 1099. In the case of a Foreclosure the 1099 is called a “1099-A”  and the ‘A’ stands for “Acquisition or Abandonment of Secured Property”. It is important to know that while there are many differences, the tax consequences for the ‘C’ and the ‘A’ are the same. Because of The Mortgage Debt Relief Act of 2007 you may not even be required to pay taxes on the ‘income’ as shown on the 1099-C. However, you shouldn’t just assume that you won’t have to pay. While we are very good at successfully closing Short Sales, we are not tax experts.

Before making your final decision, first consult a CPA or Tax Preparer.




More FAQs

Arizona Foreclosure FAQ

Do You Know the Required Items for an Arizona Short Sale Packet?

What is an Arizona short sale?

Does This Hurt My Credit?

What About Taxes after Arizona Short Sale?

Why Would a Bank Say Yes?

When is the right time to consider Arizona Short Sale

Latest videos

Arizona Short Sale Program - Video

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Arizona Short Sale Program - Video

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$2500 - $30 000 Relocation Assistance from BofA for completing a Short Sale in Arizona

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Realty Partners
8755 E Bell Road #107
Scottsdale, AZ 85260
Phone/Fax 602 308 8333