Tag Archives: taxes

Larry King, Foreclosures and Short Sale Taxation

Wednesday I had the great opportunity to be interviewed by Larry King on his show about foreclosures, short sales and the housing mess.

A lot of people have contacted me regarding the final segment in the show.  Two supposed “real estate experts” both made a huge error.

They stated that after a short sale, the home seller will be required to pay taxes on any debt forgiveness.

This is totally false.

While a bank will 1099 a home seller for any debt forgiveness on the loan, there are provisions in the tax code so the home seller does not have to declare this as taxable income.

Unfortunately, I was not on the final segment to make the correction and it stood as fact.  Hopefully I will have the opportunity to go back on Larry’s show and correct the record!