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Ellen
Ellen, Attorney
Category: Bankruptcy Law
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Experience:  Bankruptcy Lawyer. Experienced.
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Who pays the 1099 tax on a short sale in divorce

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My wife has an invest houst titled in both our names, that had $200,000 of HELOC equity spent mostly by her.
As a first mortgage In her name only as a sole & separate property, I believe that it is non recourse, however the 1099 tax will be owed on this years tax if short saled now. We filed taxes separetly and divorce filing was 2 years ago with trial weeks away. who is liable?

Hello,


Thank you for your question. I am happy to assist you.


Since the mortgage and note were in the name of your ex, she will receive the 1099 if there is income from relief of indebtedness. Since you were never liable for the mortgage and note, you will have had no relief of indebtedness.


I hope that the information which I provided was helpful to you.


Best wishes for a successful outcome. If you have additional questions, please do not hesitate to submit them to me directly.


Thank you,
FLAandNYLAWYER


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THIS IS FOR INFORMATION ONLY. NO ATTORNEY-CLIENT RELATIONSHIP EXISTS. PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE

Ellen and other Bankruptcy Law Specialists are ready to help you
Customer: replied 8 years ago.
I AM PAYING MY LAWYER THOUSANDS WITHOUT GETTING ANSWERS TO THESE CRITICAL QUESTIONS AND YOU HAVE DONE MORE FOR ME IN MINUTES THAN HE HAS DONE IN MONTHS
MY PROFOUND THANKS
DAVID RAMSAY
Hello,

Thank you so much for your feedback.

I want to point out to you that as of 2007 there are two possible exceptions to recognition of relief of indebtedness income that may apply to your wife. They are the qualified principal residence exception and the insolvency exception. If she qualifies for either, her relief of indebtedness income would not be taxed.

Here is an interesting article to read about the exceptions if you are interested:
http://jbublick.blogspot.com/2008/04/tax-consequences-of-foreclosure-or.html

If I can assist you in the future, please ask for me by name: FLAandNYLawyer.

Best wishes.


Thank you,
FLAandNYLAWYER



THIS IS FOR INFORMATION ONLY. NO ATTORNEY-CLIENT RELATIONSHIP EXISTS. PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE

Ellen and other Bankruptcy Law Specialists are ready to help you

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