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Richard
Richard, Tax Attorney
Category: Tax
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Experience:  29 years of experience as a tax, real estate, and business attorney.
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I want to short sell my condo but since I was burdened by the

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I want to short sell my condo but since I was burdened by the payment amount I rented it out and am living with family and use the rent to help with the payment even though it leaves an $1100.00 deficit. My question is: would I have tax liability from 1099's from the lender since even though it's my only property I own it's not owner-occupied? I heard another way I wouldn't have tax liability is if I'm insolvent where my debts exceed my assets, is this true? If that's the case then I am insolvent.
Submitted: 6 years ago.
Category: Tax
Expert:  Richard replied 6 years ago.

Good evening. There is an insolvency exclusion. Under the IRS rules as set forth on Form 982, you are considered as insolvent to the extent that your liabilities exceeded the fair market value (FMV) of your assets immediately before the discharge.

 

 

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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

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