Short Sales, Tax Bills and 1099s: A Fly on the Wall with John Hyre and Shaun McCloskey
A few weeks ago I was part of a rather interesting conversation with short sale guy Shaun McCloskey and real estate tax law guy John Hyre. I’d like to give you the chance to eavesdrop in on it if you’re interested.
What’s it about?
It all came about because John had mentioned that, with the market the way it is today, he’s about to add short sales as an acquisition strategy to his own real estate investing business.
As a part of our conversation John touched on some innovative ways he’s uncovered to be able to offer sellers a possible way to escape the burdensome tax liability that can often follow a short sale.
So immediately I figured another “fly on the wall” call would be the perfect way to share with the FH community exactly what John’s keyed into.
What we talked about…
- In reality, what are the potential tax implications the seller of a short sale property might face?
- Is there any legitimate way the seller can claim exemption from any “gain” on the short sale? (If so, how?)
- Many short sale sellers are finding themselves with an unexpected surprise letter from the IRS afterward. What is it, why is it, and how exactly should they respond?
- One extremely benficial thing you can offer your seller (other than cash) to help them minimize the possible tax impact of the short sale.
- A commont on HR 3648 Mortgage Forgiveness Debt Relief Act, and what it will mean for real estate investors.
- Is there a way to negotiate up front with the bank NOT to 1099 the homeowner?
- If someone files a bankruptcy either before or after a short sale, is there a chance the deficiency/1099 could be eliminated through bankruptcy?
Fair warning: Put your “thinking cap” on before listening to this. It’s very informative, but not what I’d call “light reading”. John and Shaun are smart guys, and it shows here.
It’s not all that long (about 36-ish minutes I think) and you can feel free to either listen right here or download the MP3 and stick it on your iPod.
Side Note: You’ll notice the mention of “HR 3648 Mortgage Forgiveness Debt Relief Act”.
When we had this conversation, it hadn’t yet been passed, but was still under consideration with the powers that be. At this point it’s become law. So I’m hoping to have a follow-up conversation for you shortly, to talk about exactly how this will effect real estate investing in the short sale arena.
Enjoy!
Please press “play” to listen…
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…or right-click here and “Save Target As…” to download an MP3.
Whaddya think about it all?
Your blog comment is music to our ears…
Technorati: John Hyre, real estate tax law, short sale investing, real estate investing, foreclosure investing