I have been told that if I sell my house for less than what is owed, my mortgage company will issue me a 1099 for the difference, and I will have to pay taxes on that. Is that true?

 In 2007, President George W. Bush issued the Taxpayers Debt Relief Act, which states that the homeowner will NOT owe the IRS taxes from a short sale 1099 (you will still receive the 1099 but with no federal tax implications). This act is in effect until December 2012; therefore, at this time, a short sale has NO federal tax liability associated with it.

For more information about whether a short sale may be your best option please contact

Michael Thompson
734-395-4833
thompgroup@gmail.com