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Liability for Deficiency vs. Taxes on Forgiven Debt

  • 1.  Liability for Deficiency vs. Taxes on Forgiven Debt

    Posted 10-10-2013 03:45 PM
    Good afternoon,

    Client filed bankruptcy and her personal liability on the mortgage debt has been discharged.

    The real estate was then sold at short sale approved by the lender in which the lender agreed to waive any deficiency.

    Can the lender then issue a 1099C for imputed income on the amount forgiven since they waived the deficiency?

    Thanks for any input you may be able to provide.

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    Rosanne DeTorres Esq.
    Flemington NJ
    (908)284-6005

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