Bird & Van Dyke, Inc. - A Professional Law Corporation
Contact us for a Free Initial Consultation | Se Habla EspaƱol
Stockton 209-390-8877
Tracy 209-800-8962

Debt relief for California homeowners

Christmas usually brings about holiday cheer and a large amount of debt. A law was enacted that allowed homeowners to avoid paying taxes on homes that were short sales, but that provision came to an end last year. Fortunately, California homeowners are now able to receive some form of debt relief on homes that were sold in a short sale.

Previously, if a homeowner received $300,000 from the sale of their home, but still had an outstanding balance of $450,000, the consumer would be required to pay taxes on the remaining amount, called cancellation of debt income. To protect taxpaying consumers, a letter was sent to the Franchise Tax Board to put a stop to this. Representatives stated that they would need to obtain advice from the IRS.

Eventually, the IRS stated that it would not impose taxes on homeowners who had outstanding balances from short sales. It also stated that California homeowners fall under federal guidelines which grant debt forgiveness. The tax-break has opened the door to allow struggling homeowners the opportunity to short sale their homes without having to worry about tax implications.

A short sale is a debt relief option that allows homeowners to bypass a foreclosure or bankruptcy filing while they find their financial footing. It can also save a consumer's credit score. In many situations where a short sale is not beneficial, California homeowners elect to file bankruptcy as a solution to their debt. Bankruptcy can be a fast and efficient way for consumers to eliminate their debts and the right guidance can help simplify the process.

Source: fresnobee.com, George Runner: Short-sale tax relief brings holiday cheer, No author, Dec. 18, 2013

No Comments

Leave a comment
Comment Information
Email Us Today

Contact Bird & Van Dyke

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Review Us

Stockton Office
2111 West March Lane, Suite B 300
Stockton, CA 95207

Phone: 209-390-8877
Fax: 209-478-9954
Stockton Law Office Map

Tracy Office
1138 Parker Avenue, Unit B
Tracy, CA 95376

Phone: 209-800-8962
Fax: 209-478-9954
Tracy Law Office Map