medium · National Real Estate Exam
A borrower is considering a 'short sale.' Which of the following is a potential tax consequence the borrower should discuss with a professional?
- The borrower will receive a tax credit for the difference between the sale price and the loan balance.
- The property's assessed value will automatically be halved for the next five years.
- The buyer must pay the seller's unpaid income taxes at closing.
- The amount of debt forgiven by the lender may be treated as taxable income by the IRS.
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