CalHFA cannot give tax advice or financial counsel, as every home and owner presents a unique situation, and we do not have financial advisors on staff.  The best thing to do would be to consult a tax attorney or CPA to find the implications of a short sale on your home, as state and federal regulations can be very confusing.  

The best course of action to find out about the tax implications of any aspect of your home is to talk with a financial advisor.