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if i short sale an investment property, can i make the buyers offer subject to bank relieving me of the 1099?

I want to short sale an investment property. the difference between what is owed, and actual value is signifigent, and will lead to bankruptcy. if we recieve an offer from a potential buyer, can i counter it back to say "subject to: bank not issuing 1099 for the difference"? FYI - the bank is WAMU.

Public Comments

1. sure, but why would anyone do this? You can't have your cake and eat it too.
2. They buyer wouldn't have any say in that. In fact your bank doesn't either. It's all about federal law, and how it applies in your case. If it was your principal residence, the Mortgage Relief Act of 2007 would absolve you, but I’m not sure how it applies to investment properties. You might want to get with a CPA or tax attorney on that. http://www.whitehouse.gov/news/releases/2007/12/20071220-6.html http://www.irs.gov/individuals/article/0,,id=179414,00.html
3. You can counter to anything. But WAMU will do anything they want to. Short selling is a long process. Most of time it will takes months closes. Be lucky that WAMU will even accept the short sell offer.
4. You can counter with anything you want. However, the issuance of a 1099-C for Cancellation of Debt Income is not something that is negotiable. IRS guidelines are very clear, any Creditor that forgives an amount in excess of $600 is required by Federal Law to issue a 1099-C. (You may also receive a 1099-A for Abandonment of Secured Property.) The Mortgage Forgiveness Debt Relief Act of 2007 does not apply because this was an investment property, so this will be a taxable event whether you do a loan modification, short sale, deed in lieu or are foreclosed. Mr. Financial Freedom http://www.5stepstofinancialfreedom.com
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