did a short sale on personal property in 2010 : 1st morgage wrote off 46,000 thousand; received tax form 1099 stating debt write off. Do I have to claim this $46,000 thousand as personal income for 2010 and pay personal income tax on it?
No. The gov't has allowed a 1 time write off due to short sale or foreclosure. It must be your primary residence. The
here is the link to the IRS web...
it wont let me paste it for some reason
got to www.irs.gov and search foreclosure
you will see a link to home foreclosure and debt cancellation.. this will answer all your questions
are you there?
do you have any ??
also had a Home equity line of credit that i settled but Chase Manhattan bank had to write off 35thousand against this same property in 2010. does the same government write off apply?
was it on the same house?
yes same property.
I have been through this with my niece and she wrote both off. The trick is getting the damn bank to issue the statements that show the offset (income) so you can apply the law to write it off.. You would be shocked at how helpful the IRS is at explaining everything to you. I would take advantage of their service, but at this point I would say you are ok...
give them a call. They will totally put you at ease.. they have experts in every arena.. this is a very hot topic so you will get an answer straight from the horses mouth.. The IRS!
20 years experience on wall street with both major and boutique investment banking firms