Regular Contributor
ilzhoefer
Posts: 192
Registered: ‎01-28-2013
Short sale deficiency amount question

Hello:

 

If one has completed a SS, and is liable for the deficiency amount, how is that taxed? Is it taxed as income and ups your tax bracket for that year or do you owe that amount back?

 

Also, when a foreclosure is completed, is one held accountable for the outstanding amount of the loan?

 

Thanks in advance.

 

Frequent Contributor
Kozmo
Posts: 320
Registered: ‎07-08-2012
Re: Short sale deficiency amount question
Depends on the situation and state.

Certain states allow for a deficient judgement and others dont with a foreclosure.

Talk To a tax advisor for the short sale tax questions but I believe if your held liable then I wouldn't understand why there would be a tax liability if you owe the money. If it was "forgiven" then sure. But even in that case the mortgage debt forgiveness relief act may apply.