It makes absolutley no sense. If someone loses their home because they can no longer afford the mortgage payments, then how in the world are they supposed to afford the taxes on the home they no longer have -- especially when that number can be quite large?
Well, the government in the past few weeks has decided to jump in and do something about this ridiculous predicament.
The U.S. House of Representatives voted last Thursday to get rid of the tax burden for homeowners who have had a loan forgiven or foreclosed on their home because they were unable to make their mortgage payments. The Mortgage Cancellation Tax Relief Act, H.R. 3648, passed by a vote of 386 to 27. Similar legislation is making its way through the Senate.
Since the early 1990s, NAR has supported such measures to eliminate the "phantom tax" on financially-strapped home owners.
"Congress made a good decision that will affect many Americans who find themselves in a truly bad situation," says NAR President Pat V. Combs. "Changing the IRS code is an issue of fundamental fairness. It would relieve a tax burden at a time when an individual or family has experienced a true economic loss arising from the sale or loss of their home."
Hopefully this will make it into law in the very near future. It will amount to one less stress on already over-burdened individuals.
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- Topic: Mortgage / Finance