Legal Question in Real Estate Law in Florida
Shot Sell of a Home
I am behind about three months on my mortegage and I am attempting to short sell my home through a realestate company and my bank. What will I be responsible for if the home sell for much less that what I owe?
1 Answer from Attorneys
Re: Short Sell of a Home
You MAY be responsible for the tax on the difference between the sale price and the amount of the outstanding debt.
In other words, if the outstanding debt is $200K and the short sale goes through for $100k, you should report the difference ($100k) as "income" (debt forgiveness) on your taxes. You could be responsible for the tax owed on that income. However, there are circumstances in which you can have that burden waived/forgiven. You should ask the realtor who is assisting you for more information on this, and consult a CPA or tax advisor.
You will not be responsible for the deficiency to the primary lender. However, you may also owe any 2nd or 3rd mortgages as many times these do not get wiped out.
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