California Distressed Home Sellers Not Liable for Federal, State Income Tax on Short Sales C.A.R. has just announced that it has received a letter from the California Franchise Tax Board (FTB) clarifying that California families who have lost their home in a short sale are not subject to state income tax liability on debt forgiveness phantom income that they never received in a short sale. Distressed California homeowners can now avoid foreclosure or bankruptcy and can opt for a short sale instead, without incurring federal and state tax liability, even after the Mortgage Forgiveness Debt Relief Act of 2007 expires at the end of this year, said C.A.R. President Kevin Brown. (As always, sellers should check with their tax professionals.)
Posted on: Tue, 10 Jun 2014 00:22:09 +0000
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