1099-C and avoiding taxes on investment Properties...

A prior client that did a short sale on his investment property received a 1099-C from the bank and his accountant says he owes $27,000 in taxes?  How is this possible when they earned $40,000 last year, even with form 982?  Can anyone recommend a good accountant in FL that understands how work with 1099-C's from Short Sales and can help them? Thanks much!

Views: 2849

▶ Reply to This

Replies to This Discussion

Permalink Reply by Chris Laurence on April 2, 2013 at 4:17am

@Simon Campbell, that only applies to the Principal Residence.  This was an investment property.  The basic fact is that in this case, tax is payable on the debt forgiven because the IRS treats it as income - subject to any of the many other factors that may or may not reduce or eradicate the tax for this individual.

Bottom line - all short sellers should be advised that there MAY be a tax liability on the write-off, and they should consult a qualified tax adviser

RSS

Members

© 2024   Created by Short Sale Superstars LLC.   Powered by

Badges  |  Report an Issue  |  Terms of Service

********************************** like buttons ************************