Debt forgiveness & taxes: a split decision

Is the state of California currently pursuing tax on the deficiency amount that is 1099'd in a short sale? A post on a California Association of Realtors blog tackles the question of taxation and debt that's forgiven as part of a short sale. "infowagle" (CAR counsel Sanjay Wagle) says there's relief on the federal level -- and hope for an extension of the tax break in California. He notes: Under federal law, as a result of the Mortgage Foreclosure Debt Relief Act of 2007, for the … [Read more...]