real estate

We are in a position where we have to sale home at a short sale or allow home to go into foreclosure.I have been told hat th differance between short sale and loan amount will be considered as income on next year's taxes,can we deduct that amount also as a loss?would it be better to let it go into foreclosure?I have only Disablity income an donot normanly file income tax,with this added to my disablity income how will I be affected?

Assuming this is your personal residence, it will almost certainly be a nondeductible personal loss as far as your income taxes go. And assuming you are financially insolvent, it is very unlikely that any taxable income will result either.

For your credit score though, it would seem that a short sale would be preferable to a foreclosure, although I would defer to the experience of a qualified credit counselor or mortgage loan specialist on this issue.

So doing your best to make the short sale happen would be the smart call.