Deficiency Amount on Short Sale Will Be Taxed as Income Beginning January 1, 2013 Absent Congress Acting. What Does This Mean to You and Your Broward County Short Sale?

The Taxman Cometh .... Broward County along with the rest of Florida seems to make the news on a regular basis with the latest stats and numbers on foreclosures (we have a lot) and short sales (ditto).  Lots of Florida home owners and condo owners are dealing with some really tight money situations and they're having to make hard calls on what to do about their mortgages.

Especially if they are really, really underwater.  Even more so if the bank is threatening foreclosure or has already started the foreclosure process.  It's tough out there.

Heck, even the Broward County Commissioner, Chip LaMarca, is facing losing his home to foreclosure.

So, it's difficult but necessary to throw more wood on this fire right now.  Why?  Broward County real estate owners need to know this.  Every Florida home owner who is thinking about short selling their home needs to be aware of a big, fat deadline just six months down the road.

Here it is.  December 31, 2012.

If you don't have a closed short sale by midnight on New Year's Eve of this year, then any deficiency on the sale of your home is going to be counted as income.  You will be expected to pay income tax on the amount of the deficiency - that's because the tax exemption is expiring by its own terms at the end of this year.

Unless Congress does something between now and then.

So, get moving.  Act fast.  Short selling your home just got lots more important, right?

For more, read our posts over at About Florida Law with all the details and the links.

Image:  Wikimedia Commons public image.

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