What A Deficiency & IRS FORM 1099, when doing a Short Sale in Dallas - Fort Worth Texas

If your selling your property as a short sale you may want to know what a Deficiency and a IRS form 1099 is. Today I will be explaining this to you.

What is a Deficiency? Deficiency is a judgement lien against the home borrower whose foreclosure sale did not produce sufficient funds to pay the mortgage in full.
An example would be that the borrowers unpaid loan balance is $100k and the property sold at a public auction for $80k. The lender will than seek a Dificiency judgement against the borrower to recover the remaining $20k Plus Foreclosure expenses.

Now the banks might not come after you right away for the Deficiency, but the banks might sell the it to a creditor and they will come after you several years later.


What is a 1099 in a short sale? The IRS says that there is no such thing as a free lunch. In the eyes of the IRS, If you transfer title of your property through a regular sale or through a foreclosure. The IRS says that you might be subject to pay taxes Even if you sold your home at a loss either on a short sale or a foreclosure

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Edwin D., Broker, SFR Plugin Realty, Inc.
"Connecting Real Estate with Real People"

Phone:
Local: 214-668-6088
Toll Free: 1-888-Plugin-8
Fax: 1-888-506-6632


URL's:
www.PluginRealty.com (Flat Fee MLS Service)
www.PluginRealty.net (Property Management Service)
www.PluginRealty.biz (Apartment Locating Service)
www.PluginRealty.org (Recruiting Real Estate Agents)


Texas Real Estate license number: 0584929
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