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

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