Tax and Legal Advice for the Seller

Ouch, short sales are complicated. And the ramifications for the sellers are huge! The ultimate advice in a short sale is far beyond the arena of the real estate agent – you need an attorney or CPA.

Here is the good news: There are any number of attorneys and CPAs who are available to advise sellers.

Today Michele Hassid, a CPA with Eckhoff Accountancy Corporation came to our office to talk about the tax treatments. Simply put, she said, short sales and foreclosures can be seen as a form of sale or exchange, with the gain or loss recognized and a taxable event. The term of art is COD, cancellation of debt income. E = MCC o r “The COD income equals the excess (if any) of the loan balance over the property’s fair market value,” whichever comes first.

Oh my god, Michele went into the primary issues that pop up: Is the debt recourse or nonrecourse? Is the foreclosure or short sale related to business or rental activity or personal residence? and … Was the original loan refinanced and how were the proceeds used?

No. No. No. I won’t go farther … this is territory that is complicated and full of pitfalls. Yes. Yes. Yes, there are some great resources.

Talk about a great resource …. Jeff Sterley is now the assistant manager of the Frank Howard Allen San Rafael office and we’re stoked! With Jeff comes his listing at 175 Montecito Road … just reduced by $200,000. Hey, this five bedroom home (with tennis court) is bargain priced at $487 per square foot …. as opposed to the Georgian at 315 Summit, a six bedroom home, priced at $876 per square foot. Want to see, call me!

In the last 18 months there have been ten San Rafael sales in excess of $2M. My favorite was 349 Bay Way at $4.185M … mmmm.

Now I gotta dash out to see a few homes with Patti Cohn …. only Kentfield and Ross, please. Oh well, that’s not too bad, is it?

As always, you can pop up my website www.tomverkozen.com to see what’s on the market, what great events are happening (hit the button: The Marin I Love) visit the San Anselmo Wine and Art festival or join me at the JCC Saturday evening …  


Sambaguru featurning Katia Moraes  

Sat, 7/17 @ 7pm  
as Katia’s beautiful voice leads this high-energy, dynamic 6 piece band rooted in Brazilian rhythms.
Come early for a Samba dance lesson from Tika Morgan.
Come. Live a little. Buy a home, now.

remember … visit  www.tomverkozen.com for all your shopping needs.

  

Posted by:  Tom Verkozen