[kingkool]

I plan to shortsale my house? I know it will trash my credit, but does it have any negative impact on my CPA license?

[Topsya]

Are you seriously asking this?

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Topsya]

Are you seriously asking this?

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[acamp]

It will smash your credit, but shouldn't impact licensing. If you have piles of unpaid, delinquent debt, it could–but a short sale considers the balance settled. Bank agrees to take what you can get, and says you're done.

Now, in some cases you might be on the hook to recognize the bank's loss as income (I dont know the rules about this), but if so, you might end up with a hefty tax bill and not paying it could impact licensing. I know not filing taxes can get you and active licenses canceled, I would imagine and unpaid tax bill could do the same.

Ninja + Wiley Test Bank: [FAR - 81] [REG - 76] [BEC - 88] [AUD - 73](doh!)

Becker Videos: [AUD - 82]

California CPA

[acamp]

It will smash your credit, but shouldn't impact licensing. If you have piles of unpaid, delinquent debt, it could–but a short sale considers the balance settled. Bank agrees to take what you can get, and says you're done.

Now, in some cases you might be on the hook to recognize the bank's loss as income (I dont know the rules about this), but if so, you might end up with a hefty tax bill and not paying it could impact licensing. I know not filing taxes can get you and active licenses canceled, I would imagine and unpaid tax bill could do the same.

Ninja + Wiley Test Bank: [FAR - 81] [REG - 76] [BEC - 88] [AUD - 73](doh!)

Becker Videos: [AUD - 82]

California CPA

[vjr7653]

A short sale won't have any impact on your licensing. With a short sale you shouldn't have to worry about tax implications, but if by chance you find yourself getting a 1099 for the forgiveness of debt at year end and cannot pay any tax due, just be sure to remain in compliance with the IRS. It is not a crime to owe back taxes and will generally not affect your license as long as you have some sort of arrangement with the IRS, such as an installment agreement, Offer in Compromise, or deemed noncollectable.

This happened to my friend who is licensed in NJ. His house was foreclosed, and he received a 1099. Not wanting to file a bankruptcy, he filed an offer in compromise which is still pending. When he called the state board to inquire about his situation, they said that as long as he is in the process of working out an arrangement and is in compliance, his license is not in jeopardy. In fact, the foreclosure itself did not affect his license. Hope this helps.

REG - 77 (8/27/13)
FAR - 83 (12/2/13)
AUD - 87 (5/13/14)
BEC -

[vjr7653]

A short sale won't have any impact on your licensing. With a short sale you shouldn't have to worry about tax implications, but if by chance you find yourself getting a 1099 for the forgiveness of debt at year end and cannot pay any tax due, just be sure to remain in compliance with the IRS. It is not a crime to owe back taxes and will generally not affect your license as long as you have some sort of arrangement with the IRS, such as an installment agreement, Offer in Compromise, or deemed noncollectable.

This happened to my friend who is licensed in NJ. His house was foreclosed, and he received a 1099. Not wanting to file a bankruptcy, he filed an offer in compromise which is still pending. When he called the state board to inquire about his situation, they said that as long as he is in the process of working out an arrangement and is in compliance, his license is not in jeopardy. In fact, the foreclosure itself did not affect his license. Hope this helps.

REG - 77 (8/27/13)
FAR - 83 (12/2/13)
AUD - 87 (5/13/14)
BEC -

[evesocal]

Very good point about the 1099C for COD income. Odds are you will get this. However you may be able to exclude the income from taxable income if you were insolvent at the time. Of course it still has to be reported correctly on Form 982.

B: 75
R: 80
A: 77
F: 81
Ethics: 84, 92 and done!
Licensed in California

[evesocal]

Very good point about the 1099C for COD income. Odds are you will get this. However you may be able to exclude the income from taxable income if you were insolvent at the time. Of course it still has to be reported correctly on Form 982.

B: 75
R: 80
A: 77
F: 81
Ethics: 84, 92 and done!
Licensed in California

[Author]

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