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1099 And Tax Question?

I noticed that alot of people are sending out false information about 1099s and the amount owed on foreclosures after it sells for less. If you're unaware, George Bush passed a law on December 20th that was on the front page of almost every paper stating that debt owed on a short sale or a foreclosure and a 1099 will not be owed because of the housing crisis until December 31, 2009. Tell me if I'm wrong, positive answers only please.

There are requirements which quite a few people won't meet.

1. Primary residence.
2. Loan must have been to buy, build or rebuild the residence. (Refinances to cover credit card bills won't count.)
3. Foreclosure 1/1/2007 or later.
4. (The easy one) loan less than $1Million.

The debt is sort of forgiven. Instead of automatically becoming income like it was before, it's subtracted from the property's basis. It's still possible to have a capital gain, but it would be harder....

And to tell the truth, I've seen less erroneous posts on this than I have on qualifying relatives.

This is basically true. However, as with any law, there are certainly some exceptions as to who would qualify. My understanding is that short sales prior to January 2008 will NOT be included.

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