Tax Consequences of a “Short Sale” of Real Estate vs. Foreclosure
This is one topic that many real estate investors are very confused with and truly don’t understand.
With the recent rash of foreclosures and a flood of “real estate investors” running out to do short sales on these properties… real estate investors truly need to know what the implications of a short sale vs. a foreclosure are and why many banks and borrowers would simply rather let the property go into foreclosure.
I hear it all of the time…
“Stupid bank… they went and foreclosed on the property after I gave them a perfectly good short sale offer!”
Well, there are reasons for doing this and they really make sense when you truly understand the types of mortgage that it is and the tax implications involved.
I found an excellent article written by tax expert Michael C. Gray that goes over this issue in detail.
Check out his article to learn a bit more about the tax consequences of a short sale vs. a foreclosure of real estate.
Hey, my name is Trevor and I'm the founder of The REI Brain and a real estate investor since the age of 21. Right now, my focus in real estate investing is multi-family income properties and I have plans on moving more into the commercial real estate investment world in 2008 and beyond. 
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