[WSBARP] Short sale versus foreclosure tax issue
Craig Blackmon
Craig at lawhg.net
Fri Apr 11 14:13:57 PDT 2014
The answers are:
Yes, depending on whether the insolvency exemption applies (I believe the
principal residence exemption was not extended, but I could be wrong
there, and if I am wrong then that may apply as well); and yes
Depends on the tax professional with whom you are consulting. It is a
complicated issue. Some professionals (CPAs, tax attorneys) believe there
is no COD (cancellation of debt) income because a non-judicial foreclosure
results – essentially – in non-recourse debt (likely more of the former
and fewer of the latter hold this belief). Other professionals disagree
and believe in WA a non-judicial foreclosure still results in COD income,
again subject to those potential exemptions.
Craig
Craig Blackmon
Of Counsel Attorney at Law
<http://lawhg.net/> Holmquist & Gardiner, PLLC
1000 2nd Avenue, Suite 1770 Seattle, WA 98104
Main: (206) 438-9083 Direct: <tel:%28206%29%20694-4601> (206) 438-9295
Cell: (206) 369-5949 Fax: <tel:%28206%29%20694-4601> (206) 694-4601
Founder and Principal of <http://quillrealty.com/> Quill Realty
Smarter Service. Stronger Protection. More Savings.
<https://www.facebook.com/quillrealty> Facebook //
<https://twitter.com/QuillRealty> Twitter
This transmission is confidential and intended only for the recipient(s)
noted above. It also may contain materials protected by the
attorney-client privilege or work product doctrine. If it has been sent
to you in error, please delete it and notify the sender immediately.
From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Friday, April 11, 2014 2:03 PM
To: WSBA Real Property listserve (wsbarp at lists.wsbarppt.com)
Subject: [WSBARP] Short sale versus foreclosure tax issue
Basic questions--If client sells her residence at a short sale and the
bank takes, say, a $40,000 haircut, is that considered forgiveness-of-debt
income to the client that she has to pay taxes on? And does the bank issue
a 1099?
And, in comparison to an actual foreclosure--there's never a
forgiveness-of-debt-income issue on a residential nonjudicial foreclosure,
is there? Despite the lack of a deficiency judgment?
Sincerely,
Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA 98101-2837
phone 206-625-0092
fax 206-625-9040
===============================
- To contact the list administrator, send a message to:
webmaster at wsbarppt.com
- To unsubscribe, send a new message to: imail at lists.wsbarppt.com, with
the following in the body of the message: unsubscribe wsbarp - OR - send a
message to webmaster at wsbarppt.com asking that you be removed from the
wsbarp list.
Information provided on this list should not be considered legal advice.
As with all lists - let the reader beware! No warranties or
representations are made as to the accuracy of any information provided.
All opinions and comments in this message represent the views of the
author and do not necessarily have the endorsement of the Washington State
Bar Association nor its officers or agents.
===============================
- To contact the list administrator, send a message to:
webmaster at wsbarppt.com
- To unsubscribe, send a new message to: imail at lists.wsbarppt.com, with
the following in the body of the message: unsubscribe wsbarp - OR - send a
message to webmaster at wsbarppt.com asking that you be removed from the
wsbarp list.
Information provided on this list should not be considered legal advice.
As with all lists - let the reader beware! No warranties or
representations are made as to the accuracy of any information provided.
All opinions and comments in this message represent the views of the
author and do not necessarily have the endorsement of the Washington State
Bar Association nor its officers or agents.
-------------- next part --------------
A non-text attachment was scrubbed...
Name: winmail.dat
Type: application/ms-tnef
Size: 8522 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20140411/865a5f19/winmail.dat>
More information about the WSBARP
mailing list