Short Sale Research

The Outlook for U.S. Home Prices - by Deutsche Bank - Over the last quarter, home prices in most of the U.S. have continued to fall, prompting many to question whether we are at or near bottom yet for home prices. We think not. Foreclosures are still running at a very high pace. The U.S. unemployment rate is now 9.4%, and Deutsche Bank economists see that rate exceeding 10% by early 2010. While home sales activity has picked up in some regions, much of it reflects clearing of distressed inventory and is accompanied by falling prices.

IRS Tax Publication 4681 This publication explains the federal tax treatment for cancelled debts, including mortgage debt that has been foreclosed or sold as a short sale (p. 2) . It also describes the exclusions available for favorable tax treatment (p. 4), provides Form 982 to be filed with the return  (p. 14), and a useful insolvency worksheet (p. 6).