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mcbmets
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 Posted: Tue May 05, 2009 12:54 pm Post subject: foreclosure vs short sale - fl property |
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Have not paid mortgage in 8 months - in foreclosure, but I have now been approved for a short sale. will incur loss of 300,000. Bank will send a 1099 on the short sale - will take 21% cap hit, correct? If so, am I better off going thru foreclosure - will I stil get a 1099? This is not my primary home and was not sure of recourse vs. non- recourse rules??
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 Realgeni
Joined: 13 Apr 2009
Posts: 1434
99.76 Dollars($)
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| Posted: Tue May 05, 2009 3:13 pm Post subject: |
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You cna go for Short sale which is less impact to yoru credit than foreclosure.
You will not pay taxes due to short sale. There is new low which will help you and you will not be taxed. I think it ends in 2010. |
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smithsussane
Joined: 18 Sep 2008
Posts: 4546
Location: Alaska
445.32 Dollars($)
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| Posted: Tue May 05, 2009 7:31 pm Post subject: |
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Hi mcbmets!
Welcome to forums!
I guess your lender is forgiving the deficient amount resulting from the short sale of the property. That is the reason why he will issue a 1099. This will be considered as your income and the IRS will charge taxes on it. However, depending upon your state laws, the taxes on the forgiven amount can be removed.
I feel short sale is a better option than foreclosure. This is because, it will have a less impact on your credit. A short sale will reduce your credit score by 75-100 points. On the other hand, a foreclosure will lower your credit score by 250 points. You can contact your lender to know whether the loan is recourse or a non-recourse one.
Feel free to ask if you have further queries.
Sussane |
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Realgeni
Joined: 13 Apr 2009
Posts: 1434
99.76 Dollars($)
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