Question: If I do foreclosure or short sale on home,suppose my home is sold for $225000 when my original mortgage is 295,000, so the diffrence is 70000, Do I have to pay tax for that amount?
Answer: I will need a little bit more specifics in regards to your situation, if this is a primary residence, and your mortgage debt is partly or entirely forgiven during tax years 2007 – 2012, you may be able to claim special tax relief and exclude the debt forgiveness income.
I would definitely suggest contacting your tax accountant for more specifics.
