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If I am shortselling a rental property

Posted on: 14th May, 2009 11:35 am
If I am shortselling a rental will I be held responsible for the differenc if my house sells for less than I owe.

If the bank forgives the remaining debt will I still be taxed since it is a rental and not my primary?

Does having no real assets help to decrease the chances?
Does the bank have a time restriction to go after the difference?
Yes they can probably come behind you, unless you negotiate a full release as a part of your agreemtn with the bank.

If your bank forgive's yru difference then they are goign to send you 1099-C. This form means income for you, resultign in taxable income.

Having said that, With the Mortgage debt Forgiveness Act of 2007, you will be able to exclude up to $2M dollars of debt forgiven on your PRIMARY RESIDENCE filign jointhly.

Debt forgiveness on the secodn home, rental property, business property or credit card do not qualif.
Posted on: 14th May, 2009 12:33 pm
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