Can I be taxed for the difference if I short sale my Florida home?
Many homeowners look for alternatives to foreclosure before the actual case is filed or even during the pending case. The banks typically will require the homeowner to fill out a financial packet before they agree to any alternatives to foreclosure or loan modification.
The paperwork can be exhaustive and comprehensive. Furthermore, the homeowner will be divulging personal, financial information, in addition, to asset information. This can be risky considering the bank may look for a deficiency judgment against the borrower. If the bank discovers several unencumbered assets, it may tempt the bank to pursue the deficiency aggressively.
If a borrower short sales his or her primary residence, then the borrower should not be responsible for the tax liability (on the difference). If the borrower short sales an investment property, the borrower will most likely receive a tax bill for the difference, if any. Typically, the bank releases borrowers from personal liability on any deficiencies, but the tax liability probably will remain.
For more on alternatives to foreclosure, you should contact an experienced attorney.
If you have questions about Florida Divorces or Bankruptcy Law contact a Florida Attorney
Greg Gilbert
Keith Maynard
