Californians: IRS and CA FTB Confirm No Taxes for Short Sales Due to CCP 580E

Posted by on Dec 5, 2013 in Government Bills, Regulations and other news affecting, Short Sales Stop Foreclosure | 2 comments

Californians:  IRS and CA FTB Confirm No Taxes for Short Sales Due to CCP 580E

It’s official according to the California Association of Realtors (CAR). ¬†As expected, the announcement earlier this month from the IRS courtesy of CAR and Senator Barbara Boxer, the IRS will consider any short sale taxable shortages (1099) for California homeowners will be forgiven due to the strict guidelines set forth in the 2011 law, CCP 580E.

The California Franchise Tax Board (CA FTB) agreed and confirmed in a letter directed to CAR that California agrees that this law gives distressed property owners in California a pass on taxation of the amount difference when completing a short sale.

California Franchise Tax Board States No Taxes on Short Sales

California Franchise Tax Board States No Taxes on Short Sales

2 Comments

  1. Does this ruling include non owner occupied single family properties?

    • Just like a fingerprint, everyone’s tax liability is unique to them. A non-owner occ. may qualify if the seller is “in-solvent”.

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