Does anyone have good information regarding short sales and 1099?

Answer by  patti (29325)

A 1099 simply reports income other than taxed wages. For example, if a debt of $10,000 is settled for $6000, the $4000 different would be considered income. Because it is in excess of $599, the creditor is required to issue a 1099, which will state simply the dollar amount.

Answer by  acre (29)

You could be liable for the banks' loss if you refinanced with "cash-out". If you do get a 1099 it will show that amount which you did not repay and are "liable" for taxes on.

Answer by  Dean (4035)

If the difference is in excess of $599, you should receive a 1099 from the lender, showing the amount that was written off.

Answer by  mb (5482)

Short sales are actually easier to document than regular sales. Fill out the 1099 as usual with purchase and resale price. You don't have to worry about the "taxable improvements".

Answer by  Jalaine11 (2043)

Yes, you should get a 1099 for the short sale of your home. Only the amount the bank "forgave' should be on it. You will pay taxes on this amount.