Do you owe tax if you close a short sale?

Q: I have heard I may owe tax if I complete a short sale on my house, is this true?

John M. (Livermore CA).

A: As a Realtor I need to to tell you that we are not qualified to give tax advice,

the answer may depend on which state you are in, whether the loan is a first or second mortgage.

You should contact a tax advisor, or check with the IRS.

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