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With the market crash, my loan is now negatively amortizing.
Asked on August 3, 2011 New Jersey
Answered 13 years ago | Contributor
In all likelihood if a short sale happens with you home where it is sold for less than what is owed on it, you will be subject to possible taxation for the "forgiveness of the debt" both at the federal and state level.
Before you close the transacion on the short sale, you should speak with a tax attorney or a certifiied public accountant about the tax ramifications to you if you receive "debt forgiveness" on the transaction. Possibly these two types of tax experts will be able to assist in minimizing the perceived taxable event on the short sale to youand if not, you will be prepared for the result.
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