The IML Real Estate Blog

There Will Be NO California State Taxes On Debt Forgiven In A Short Sale!

April 9th, 2010 1:41 PM by Dave Gubler


Thousands of Californians can breathe a bit easier as California Senate Bill 401 has passed in both the Assembly and in the Senate and all indications are that Governor Schwarzenegger will sign it in to law.  

At present time the amount of debt forgiven by a lender in a short sale or a foreclosure is considered taxable income by the state of California.  SB401's passage brings California in line with the federal government's relief for mortgage debt forgiven (via the The Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act of 2007) and will protect people who sell their homes as a short sale from paying state income taxes on the amount of debt forgiven.  The current text of the bill is available here: SB 401.

Visit for a variety of information regarding short sales.

(You should consult a tax professional in order to determine the exact implications of SB401 & MFDRA of 2007 for your specific circumstances.)

Having Trouble Making Your Mortgage Payments?

Do You Owe More On Your Home Than It's Market Value?

Do You Want To Minimize The Damage Done To Your Credit?

Avoid Foreclosure And It's Consequences, Get A Fresh Start.

A Short Sale May Be The Right Solution.

Short Sale Assistance

No Obligation Short Sale Consultation

Benefits Of A Short Sale

Short Sale vs. Foreclosure

HAFA Short Sale

Free Home Valuation: What Is Your Home Worth?

Dave Gubler / IML Real Estate


Facebook Link    Subscribe To Our RSS Feed   Linkedin Link  

Posted in:General
Posted by Dave Gubler on April 9th, 2010 1:41 PM



My Favorite Blogs:

Sites That Link to This Blog:

IML Real Estate

26561 Carretas
Mission Viejo, CA 92691