for automated calcualtions go to short sale and reposession calculator clicking here, once, then page down.

Thanks to the new 2007 Mortgage Forgiveness Debt Relief, you don't have to mess with complicated
capital gain and ordinary income tax calculations.  For the next three years, the debt forgiveness of your residential mortgage will ot be taxable as it used to be in the past. This new income tax resolution has made it more flexible for tax payers to be able to avoid capital gain tax and ordinary income tax.

Is your property loan a non recource loan?_____

Did you own and used your home as your primary residence at least 2 years

out of the last 5 years and you have not taken an exclusion in the past 2 years?_____

PART 1. is for cancelled debts (recource loans) only

step1.-  enter the amount of the debt caceled by the short sale transcation.----- $___________

step 2.- enter the fair market value (appraised value) of the transfered property - $__________ 

step 3.-subtract  2 from 1 if less than zero, enter zero.------------------------------------ $__________

PART 2. is for repos and foreclosures (non recource loans)

4.- enter the smaller of step 1 or 2 (if you are not personally liable for the debt,

(a non recourse loan) enter the amount of the debt caceled. this amount is usually,

the same amount that the lender is going to put on the 1099A or 1099C form.----- $__________

5.-enter the adjusted basis of the home (what you paid for home + improvements)- $_________

 6.-This is your gain or loss from foreclosure  or repossesion. subtract 5 from 4.----$__________

If your result is negative, It's a loss and is not a deductible loss on personal property. If you have a gain. This gain may be excluded from you income if all the tests are met for your home to qualify as your main residence or you had to sell your home due to unforseen reasons such as unemployment, divorce, or health cause. Please call for details.

NOTE: YOU MUST KNOW FROM YOUR LENDER IF YOUR LOAN IS A NON RECOURSE LOAN OR A RECOURSE LOAN.