We are a local Gilbert Arizona CPA firm and we are offering advice to homeowners who are facing foreclosure or contemplating a short sale of their home.
Phoenix-Mesa, AZ (1888PressRelease) June 01, 2009 - In today’s difficult real estate market, many homeowners are losing their homes through foreclosure, short sale or a deed in lieu. Entire communities have been affected as property values decline. Unfortunately, many homeowners who lose their homes find themselves faced with significant tax consequences.
“People are concerned and often scared. Many have lost their jobs and are now losing their homes,” said Paul B. Sundin, CPA. “In addition to this, they must now deal with any resulting tax implications. Homeowners must do everything they can to educate themselves on their tax situation.”
The general rule is that debt cancellation or debt forgiveness is a taxable event. However, relief exists for some homeowners under the Mortgage Forgiveness Debt Relief Act (the “Act”). Debt that is foregiven through a foreclosure, a short sale, or a principal balance reduction may qualify for this relief. If a homeowner is not able to exclude all of the debt cancellation, there may be relief if they can prove they were insolvent immediately before the debt cancellation.
“Many homeowners will find relief under the Mortgage Forgiveness Debt Relief Act, but that won’t provide relief for everyone. But even for those who don’t qualify, the IRS offers relief for many taxpayers who are insolvent. Insolvency can be difficult to calculate. Taxpayers need to make sure that they seek the assistance of a CPA or other qualified tax professional.”
If you had a foreclosure or short sale during the year, you will likely receive a 1099-A or 1099-C at the end of the year. You should review any 1099 you receive carefully and notify the lender if any of the information shown is incorrect. You should review your 1099s with a qualified CPA to determine any tax consequences.
Paul B. Sundin, is a CPA in Gilbert, Arizona. He provides assistance to taxpayers going through a short sale, foreclosure, or a deed in lieu. Specifically, he can assist you with:
• Reviewing your 1099s for inconsistencies or errors;
• Calculating any gain or loss from the sale or disposition of the real property;
• Determining whether you meet any debt cancellation exclusions;
• Calculating insolvency as of the debt cancellation date (if applicable); and
• Completing the required income tax forms and schedules.
He also provides tax preparation and tax planning for individuals and business owners. Please see his website at www.sundincpa.com or you can contact him at 480-626-8043 or paul ( @ ) sundincpa dot com dot He serves the communities of Gilbert, Phoenix, Chandler, Mesa, Queen Creek, Scottsdale, and Tempe dot
This release is intended for informational purposes only and is not meant to be tax or legal advice. You should contact a tax or legal professional to discuss your situation. To ensure compliance with the requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
We are a local Gilbert Arizona CPA firm and we are offering advice to homeowners who are facing foreclosure or contemplating a short sale of their home. 
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