Hi,
Understand need to ask a CPA but looking at options other than insolvency for a short sale seller and just wondered if anyone here had simply used fact that the $500,000 allowable net on sale would offset the 1099C income...
Thanks for any input!
Pat Hood
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That tax exclusion is currently expired. They may or may not renew it again for 2018, but odds are we wont know until 2019.
I am not a CPA, but I have seen some CPA's use that same capital gains exclusion methodology to apply it - primary residence 2 out of last 5 years. So if they do extend the act, I assume many CPA's would continue to use that same logic. But obviously - ask the CPA to be sure.
Minna,
Thank you. Will send this on to the CPA.
Pat
Not a CPA but never heard of that and have a high confidence you can't do that.
When did they enter into contract? If it was 2017 the mortgage debt forgiveness act may still apply. Not sure of the nuances of entering into contract in 2017 means.
Thank you, Brett! Contract in March of 2018 and closing tomorrow ...two liens. In Arizona so first will be ok due to non-recourse for purchase money loans here.Tax attorney I spoke with a couple years ago stated in AZ even without Mortgage Debt Forgiveness we are ok because of those state statutes. It is the second HELOC that I am looking into with my clients' CPA. He'll get about an $89,000 1099C on the second.
Just thought checking on the $500000 was worth a try!!!!!????? I will keep checking and share on this site if that might be an option.
Thank you for always being so prompt with your responses!
My best,
Pat