Can I be issued a 1099-C 6 years after a short sale?
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Can I be issued a 1099-C 6 years after a short sale?
I recently received a 1099-C after I short sold my property. Can the lender legally pursue the difference within or after 6 years?
Asked on May 16, 2012 under Real Estate Law, Nevada
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Please seek help from an attorney in your area on the matter as soon as you can. I am assuming that what you are worried about here is two fold: that you would be sued for the deficiency (which I hope you got a waiver of deficiency) and that the IRS will consider the deficiency income (because a 1099-C just tells the IRS that the lender wrote off the debt as uncollectable for tax purposes). Fortunately the IRS has a provision that may help you and look at the matter in your favor (i.e., it is not income). See the Mortgage Forgiveness Debt Relief Act of 2007. As for suing you if there was no waiver, you need to look at the statiute of limitations in your state (which I understand is 6 years for contracts in Nevada). Good luck.
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