The California Senate has just passed a bill to forgive the income tax consequences for a short sale.
A short sale is a negotiation with the mortgage lender to accept a sale of a home for less than the mortgage value. It functions as a complete forgiveness of the mortgage debt. The bill, SB 30, works to extend CA tax relief on short sales until January 1, 2014, and will apply retroactively back to January 1, 2013. In summation, it’s a great time to short sell your home in California because the seller will not have to pay either federal or state income taxes associated with the short sale!
However, a short sale is still a sophisticated negotiation with a mortgage lender that is most effectively accomplished by a qualified debt settlement attorney. If you are underwater in your home’s value, contact a qualified debt settlement attorney. A qualified debt settlement attorney can explain the options available to you, and ensure the highest likelihood your short sale will be approved by the mortgage lender.