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After Foreclosure, is it a good idea to do short sale in the redemption period:

1. My house is foreclosed in the month of November, Now I am in the 6 months redemption period. On the sheriff sale date, bank re-purchased with FULL PRICE. What I understand is in Michigan if bank purchased the lone with full price I am not woe any thing to bank. But do I have to pay any tax to IRS for the difference amount?

2. I have a buyer willing to buy the house for short sale, If bank approve the short sale what is the benefit for me. Since bank re-purchased with FULL PRICE of the lone. They can’t come back to me for collection.

If I go for Short Sale, I will get 1099 from IRS, I know upto 2012 I can got exemption for tax.

Please advice me is it a good Idea to do short sale after Foreclosure (Which is fully paid my the Bank in Michigan)

Shanti