Understand the Tax Implications of Home Foreclosure and Short Sales

When a mortgage company forgives part of your debt in a foreclosure or short sale, that forgiven debt can be considered phantom income by the IRS. Even though you received no money, you received value. Before you sign any mortgage documents, talk to a bankruptcy attorney about the tax implications.

Call (916) 797-1397 for a free consultation with a home foreclosure attorney.

The IRS will not go away. Relief of debt will be documented by a form 1099C — a notice that you received monetary value. You could owe taxes on that value.

Short sales can create a tax liability.
Is it worth the tax obligation? Talk to your attorney. In other words, can you afford to stop a home foreclosure at the cost of tax liability?

A short sale can also generate paper profits on which you will be required to pay taxes. What seemed like a good deal to avoid home foreclosure can become a tax pitfall in many cases. Contact an experienced lawyer who knows how to evaluate your options from every angle — including the tax angle.

Know the tax implications before you make a foreclosure decision.
The first consultation is free at Coggins & Johnston law firm. It will give you a chance to get answers to your questions and make an informed, educated decision about your foreclosure choices. No matter what your decision, we can help you end the financial struggle and get a fresh start.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

The Coggins & Johnston law firm in Roseville, California, represents bankruptcy and foreclosure clients in Sacramento, Roseville, Rocklin, Granite Bay, Lincoln, Citrus Heights, Davis, Rancho Cordova, Folsom, Woodland, Carmichael, North Highlands, Yuba City, Fair Oaks, Orangevale, El Dorado Hills, Auburn, Placerville, Gold River, Loomis, CA, and other communities in Placer County, Sacramento County, Yolo County, El Dorado County, Yuba County, Central California and Northern California.