I tell them up front.

I haven't done one in awhile but yes we did make investors aware as well as people with second mortgages that wouldn't qualify for MIRA. FYI, NAR is lobbying now to make MIRA permanent and it is looking positive.

Roy, our state short sale addendum does a good job on this and tells the seller to seek legal and accounting professionals for advise.

I have a disclosure statement that I have the parties sign

The Real Estate Attorney I use always tells the client Roy. Very good question.

There is a form you can down load from the IRS website that needs to be completed and given to the person that prepares the tax return. 

Hi Roy -- California has a short sale addendum.  I don't advise on tax, financial or legal consequences but always advise that a seller(or buyer depending on the circumstances) consult appropriate professionals.  

I refer them to a professional in that field. I use a prfoessional negotiator who update sthem and also refers them to an accoountant, 

When there are 'consequences' to the directions provided you MUST refer them to the appropriate professional. Otherwise the 'consequences' may be upon you.

Your attorney can further expand on this fundamental.

We have copies of the current laws in our short sale package we give to sellers and always suggest that they speak with an accounting professional.

I just say there are/could be tax consequences and they need to consult with their tax advisor.