Californians who sold their home in a short sale in 2013 may be at risk of overpaying their state income taxes.
As you may recall, the Franchise Tax Board informed me late last year that Californians who had mortgage debt forgiven in a short sale are not required to pay income tax on that debt.
I’ve recently learned that some tax preparation software may not be up to date, potentially forcing affected Californians to pay taxes they don’t owe. Adding to the confusion, some tax preparers may not be aware of this problem.
If you have questions, please contact my office at 1-916-445-2181. For more information on mortgage forgiveness debt relief and short sales, go to FTB’s webpage or call FTB at 1-800-852-5711.
If you are unsure whether your tax preparation software is calculating your short sale correctly, you should contact the tax preparation software company’s customer service department for assistance.
Taxpayers should never have to pay more taxes than they owe. Be sure to look carefully before filing to avoid overpaying… Read More