Danette O'Neal, PhD

If you end up having to short sale in 2013, you may be able to escape taxes another way. If what you owe all your creditors exceeds the value of everyting you own, you may not owe tax. Read about the insolvency rule in Publication 4681. Despite its name, a short sale often takes a long time to complete. To ensure you have short sale success before the tax rule changes, work with a real estate agent who has done short sales, promptly give your lender any paperwork it asks for, and pray for patience. You’ll need it.