real estate


Question by  mturk79 (98)

What is the property tax liability for a short sale of a home?

I need to know the tax implications of a short sale of a home.


Answer by  eyeguy (3760)

In short sales the seller is often responsible for the difference between amount owed on the loan and the homes value. The sellers often responsible for closing costs and realtor fees. If the lender "forgives" the difference between mortgage and the selling amount, the seller must now pay taxes on the "written off " amount.


Answer by  bubbagump (94)

The tax liability is the same whether you are short selling or keeping the property for the long term. It depends on the value of the home.


Answer by  tamarawilhite (17883)

If you sell the home for less than is owed, this does not reduce any outstanding property tax bills. The debt forgiven by the lender can be taxed as income.


Answer by  Ralphie1954 (420)

The present owner or bank would be responsible for the tax to date. Taxes are generally paid in arrears so if the taxes were due in May for example, the owner or bank would be resonsible for 5/12ths of the tax bill. Make sure that the bank takes care of all liens and back taxes that might be due.

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