With national elections behind us and the Mortgage Forgiveness Debt Relief Act “appearing” to come to a close (stay tuned here), Team MRG now explores a large segment of the “pondering short sale” homeowner population that either
A) Has never lived in the home they’d like to short sale
B) Has lived in the home at one time.
We answer this question a lot. In fact, about 1/3 of our clients are landlords.
The answer on whether you can short sale your rental property is? “Yes…BUT…”
There may be possible tax consequences. That’s a big IF because you may be exempt. As a matter of disclosure, personal tax issues are in fact that – a personalized matter that varies from individual to individual depending on a homeowner’s tax situation, etc. Thus, as much as we love sweets, we cannot make a cookie cutter assumption on this article. (If you do have a situation you’d like our opinion on, just get in touch).
As an initial rule of thumb, you can determine whether you’ll be liable for tax consequences when short selling rental property:
1) If within the last 5 years you lived in the home (for at least 2 years). You may qualify under the Mortgage Forgiveness Debt Relief Act.
2) If not, then you may qualify for insolvency under IRS rules. (Hint: More often than not, if you’re approved for a short sale, you’re most likely insolvent. To be sure, contact us to discuss).
Bottom line: As of today’s date, banks (Wells Fargo, Chase, Bank of America and others) are still doing a number of non-owner occupied short sales. If you’re on the fence, don’t delay.
About Magnus Realty Group, Inc: A provider of superior Real Estate Sales & Property Management services in San Diego County AND the Southern California region, Magnus Realty Group, Inc. is an experienced & sophisticated provider of Real Estate Sales, Short Sale Services, and Full-Service Property Management services.
Learn more at www.MagnusResults.com