Canceled Debts and what your CPA better know.

By now you all have heard of the tax concerns for homeowners in respect to short sales and foreclosures. If you are a Realtor you know that you have to stay away from offering advice in a field you have no experience in. Even if you do have experience if you are not in fact the CPA for the client you are speaking with you risk major issues down the road.

Refer your clients to a qualified CPA with any and all questions related to thier taxes. If they are experiencing a short sale or forecosure it would not be the year for them to file on their own.  If you would like to refer your clients to IRS Form 4681 that will define much of what they might need to know. Even with this knowledge I suggest they use a CPA and particularly one familiar with short sales or foreclosures.

IRS Publication 4681: Canceled Debts, Foreclosures, Repossessions, and Abandonments (For Individuals)
Download the document at Link: http://www.irs.gov/pub/irs-pdf/p4681.pdf