Short Sale Tax Consequences Ease for CA Homeowners with SB 458

July 23, 2011 - PRLog -- Short sale tax implications for distressed home owners improved tremendously this week as Governor Jerry Brown signed Senate Bill 458 into law, effectively eliminating secondary lien holders from going after sellers following a short sale.

Previous legislation, SB 931, protected sellers from a deficiency judgment by a first lien holder after a short sale but did not provide any form of relief against judgments filed by secondary lien holders following a closed sale.  This resulted in many sellers being levied with judgments for any amount not paid in full to the secondary lien holder and had obvious and severe credit implications.

Now, with the passing of SB 458, the door has opened for many Californians to avoid the negative short sale tax issues of the past and get on the road to credit and financial recovery faster and without the pending doom of a large judgment.  The bill will prohibit the holder of a note from requiring the trustor, mortgagor, or maker of the note to pay any additional compensation, aside from the proceeds of the sale, in exchange for the written consent to the sale.

"This decision is fantastic news for the millions of California home owners who are currently upside down on their mortgage and have both a first and second loan," stated Financial Accounting Specialist founder and 2010 Sterling Business Owner of the Year, Frederick Karma.

SB 458 will cover any dwelling of 4 units or less which is sold for a sales price less than the remaining amount of indebtedness.

Please contact Frederick Karma of Financial Accounting Services for more information on the tax implications of a short sale.  951-719-1515  http://www.shortsaletaxpro.com

# # #

Mr. Fred Karma is the founder of Financial Accounting Services. He has been in business since 1986. He focuses on tax planning and helping small to mid-size business owners. Mr. Karma holds a Bachelors Degree and a Masters Degree in Business Management & Accounting. To keep up with the changes, Fred is a member of the National Society of Enrolled Agents, National Society of Accountants, and a Certified QuickBooks Pro-AdvisorSM.
Fred resides in Temecula, California with his wife and 3 children and is an Enrolled Agent licensed to practice before the IRS. http://www.taxmanfred.com