SS Question For Sspro
If a seller files bankruptcy then does a short sale.....would they get 1099 or would that earned income tax(1099) be considered a solvency.
If a seller files bankruptcy then does a short sale.....would they get 1099 or would that earned income tax(1099) be considered a solvency.
Sorry, not SSpro but will post anyway!
It is my understanding that no matter what seller does the lender can issue a 1099 on the deficiency amount. You cannot stop lender from issuing 1099 on money they lost on mortgage. The seller can file bk on debt after sale to eliminate deficiency or just dispute validity of 1099 tax with IRS.
Have seller/yourself speak w/ real estate / tax attorney for clear answer in your state.
Thank you for your post .....