Short Sale in California

My client moved to another state because of employment reasons.  Job was not in the same job field.  Conducting a short sale on this home in Ca.  Is he subject to tax implications if he sells the home.  It was his primary residence.  Used a FHA loan in Oct. 2009.  Only one loan and did not refinance.

Thanks for any feedback.

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Permalink Reply by Bryant Tutas on January 5, 2012 at 1:35am

Joseph. He should speak with a tax professional. However if the property qualifies as his primary residence for tax purposed then he should be exempt from Federal taxes due to the debt relief act. However this act expires at the end of 2012.

The bigger issue will probably be showing the FHA why he no longer lives in the house. FHA requires the property to be owner occupied. Make sure he has a good verifiable explanation. And he needs to do the short sale before too much time expires.

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