Recent Feedback
I have received a offer for 75000 on my condo and I have a250000 morgage with PMI I am concerned about receiving a 1099 Is there a way to avoid this?
Optional Information: State/Country of Question: Florida Already Tried: O have a 250000 mogagae om a condo with PMI I have received a 75000 short sell offer which I will need to submit to the lender thru my real estate broker, I am concerned of my tax problems if I receive a 1099 for the difference and if there is a way to avoid this outcome
Unfortunately not. This is entirely up to the bank as to whether to file the 1099, but because not filing negatively impacts their ability to write down the debt for their own taxes, it is likely they will file.
does the fact that there is PMI on the loan help ,
No, unless the PMI picks up the difference between the sale price and the mortgage due. IF so, then no 1099 should be filed.
If the property was forclosed instead of a short sale would that eliminate the problem?
No it would not.
Can I require the cancellation of the debt by the lender as a condition of the sale on the short form application ?
You can try, but the bank is unlikely to accept it. The bank is under no obligation cancel the debt.
Experience: Negotiate, Draft, and Review many complex commercial agreements each year.