My favorites are when an investor-buyer is the contact and they show up with a list of repairs as long as a Tom Clancy novel. They usually have a lot of cosmetic issues (paint, carpet, etc) and substance things that they can't really detail, but tell you (like the water heater is ten years old, so it may fail tomorrow).
Do you think any of these people tell the owner about the 1099 possibility?

I do irs form 982(insolvency) easy fix.Problems with 1099's is when the sellers are given bad information or don't use a competent tax professional who can easily eliminate the phantom gain for forgiveness of debt.

excuse my ignorance in my own thread...but im lost as to what you are discussing what is the 1099 issue with a short sale....1099's are the tax form an agent fills out after a sale correct?...whats the issue?

I don't mind the lists they have as long as they are realistic. I discount the value for cosmetics (paint, carpet), because they do impact what a buyer would be willing to spend. What bugs me is when they tell me that the house needs a $30k kitchen remodel when the house is 5 years old, it's only worth $150k repaired and there's nothing wrong with the kitchen.

A 1099 is a tax form used to report many types of non-employee income. Debt forgiveness is one of them. If a person owed $150k and the lender agrees to take $100k for the short sale, the seller is likley to get a 1099 for the amount of the debt that was forgiven (in this case $50k) and is responsible to report that on their tax return. As super mentioned, there are ways to deal with it, but if you are doing short sales, you need to understand this.

that makes perfect sense...ohagent your an asset to this site : )

thanks for the info