IRS wants more blood from the turnip!

Recently, Kenneth Harney wrote an article for the Washington Post on the rules of the IRS and how those rules apply to short sales. The bottom line; any personal debt that is forgiven by a creditor is considered taxable income. So for those folks who are delinquent on their mortgages and ask the lender to approve an offer for less than is owed on the property – that difference is taxable income. There is no hoping the IRS won’t notice as the law requires the lender to report these acts of forgiveness to the IRS. There is some hope though as there is legislation in progress working to exempt law-biding citizens from this double whammy of losing your equity and paying for it with taxes. To read the entire article go here.