Do I owe short sale taxes?

The issue of taxes on a short sale come up almost as much as what is a short sale. Short Sale taxes are to a certain degree problematic when compared to the normal real estate transaction.

First of all, if the home is the seller's primary residence and they sell it via short sale then they are exempt from taxes on it under the Debt Forgiveness act of 2008 (was extended). So short sale taxes don't really come into play in this instance. For investors or people who have moved on however, taxes could play a role.

However, as this Short Sale Tax Video, but it sure looks like investors shouldn't owe any short sale taxes let alone any taxes period. One thing that will throw off this conversation is previous depreciation taken on the home and home owners that did not buy as investments but have rental homes for example that they purchased through non-traditional financing such as 100% financing. However, if you purchased your home for a higher value and sold it for less, there's still a loss. For more answers consult with a CPA.  (Joshua Wilson an Atlanta CPA featured in the video)

If you have other short sale questions comment below or call 770-406-6123. You can also learn more by watching our real estate videos.