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Does the Mortgage Forgiveness debt relief act include short sale?

Marysville, CA |

I sold my house in a short sale back in 2007 and i recieved a bill from the IRS recently for taxes on the cancelled debt and i am wondering if it falls under to MFDR act?

Attorney Answers 1

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The Mortgage Forgiveness Debt Relief Act includes short sales of your principal residence that were financed by a qualified mortgage. That is a loan that was used to buy, build, or substantially improve your personal residence.

Disclaimer - This presentation does not constitute legal, accounting or other professional advice. Only through a personal, confidential consultation with qualified legal counsel can anyone properly evaluate their own unique estate planning challenges and determine what, if any, appropriate legal strategies and tactics should be implemented to meet those challenges.

Circular 230 Disclaimer - “Nothing in this presentation is intended or written to be used, and cannot be used by any person for the purpose of avoiding tax penalties regarding any transactions or matters addressed herein. You should always seek advice from independent tax advisors regarding the same.”

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