Understanding the Tax Implications when considering whether a short sale is right for you

Hello this is Kerri with the Bay Area Short Sale Angels. Bay Area #1 short sale team. A lot of clients first question is what the tax consequences will be when filing for a short sale. The tax consequences will always vary on whether it is a owner occupied property or an investment or renatl property. Of course the first thing to always do is seek the advice of a tax professional to make sure you are aware of what the consequences will be. In my experience if it is an owner occupied property you will not have to pay federal tax on the forgiven debt and as of the last 8 months in California there are also no taxes on the forgiven debt. Having said that, it is still in your best interest to double check with a tax professional to make sure no tax codes have changed recently. On the other hand if it is an investment property in my experience there has been no federal tax penalty but within the state of California there could be some tax penalties on your forgiven debt. I am certainly not a tax professional and only speak from past experience but you can never be too careful when considering the tax implications of your short sale property. Hopefully that helps and hopefully you meet with your tax advisor before starting the short sale process. This is Kerri from the Bay Area Short Sale Angels, your Bay Area short sale team where we believe there is nothing worse than doing nothing.



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