Under normal IRS rules forgiven debt is treated as taxable income. Under the Mortgage Debt
Relief Act of 2007, as extended by the American Taxpayer Relief Act of 2012, certain debt forgiven in a short sale is exempt and not taxable. Please consult with a tax professional about your specific situation and whether your debt is exempt, or call the IRS tax assistance line at 800-829-1040 or visit the IRS web site at www.irs.gov.
Want to learn more? Download our free white paper, Frequently Asked Short Sale Questions. If you would like to arrange a complimentary consultation with an agent who specializes in short sales, email us at concierge@lizmoore.com.
