Do i have to pay taxes if i short sale my home in Arizona?

I want to do a short sale of my home in QC and am going through the process of it but i was just told by a friend that i will receive a 1099 at the end of the year and pay the taxes on the difference. When i spoke with the person that is doing the sale he told me that AZ is a anti deficiency state and I will be fine. I don't want to be SOL if he is just trying to get a commission out of me and I'm stuck paying taxes at the end of the year! PLEASE HELP!!!