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Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 704
Experience:  Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
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We short sold our house in Wisconsin and move to Tx after my

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We short sold our house in Wisconsin and move to Tx after my hubby lost his job. We bought a house in Tx before the house in Wisconsin was sold. Will we still qualify for the Debt Releif Tax Act and also will we owe state taxes if we live in TX and it sold in Wisconsin.
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As long as the short sold home will be sold by 12/31/2013, the home will qualify for the Mortgage Debt Relief Act provisions. The fiscal cliff deal extended those provisions for one more year.

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Customer: replied 3 years ago.

I read on the IRS website and it said that it had to be your primary residence to qualify. It was our primary residence before we moved. We moved persuing work and I bought a house in my name, which closed before the house in Wisconsin sold. So would the house in Wiconsin still have been our primary residence . It was at the time the house was put up for sale but not by the time the sale was final. Also if we do end up having to pay will we have to pay Wisconsin state taxes because the house sold in Wisconsin?

The house would be considered a primary residence as long you lived in the house for 2 of the last 5 years prior to the short sale. If this is the case, the house still qualifies for the Mortgage Debt Forgiveness Act provisions.

Let me know if there is anything else that I can do for you.
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