As this housing market debacle unfolds, our understanding of all the ramifications of short sales and foreclosures is also maturing.
This week, the big "news" in my neck of the woods focused on the many short-sale sellers who have gotten a big old tax bill for their "canceled debt income" — not from Uncle Sam (the federal exemption for taxes on most "forgiven" mortgage debt is good through 2012), but from the State of California’s Franchise Tax Board. The hue and cry from both homeowner and industry quarters was deafening.
You see, in almost all other real estate matters and relationships these days, everything is negotiable. Buyers, sellers and even, to some extent, banks are all operating with much more flexibility and transparency than ever before (even though there’s still room to grow).