Found 1 blog entry tagged as ca short sales.

 

Sellers that short sale Los Angeles Real Estate no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification.  Enacted into law April 12th 2010, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law.  For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences.  The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially…

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