To Avoid Potential Tax Ramifications of a Northern Virginia Short Sale, Timing is Everything
At the end of 2012, the federal government's Mortgage Debt Relief Act will be expiring. If you think that's not a big deal, then you are either not in the market to sell your principal residence in a Short Sale or have no clue what I'm talking about.
The Mortgage Debt Relief Act was a law enacted that meant tax forgiveness on forgiven mortgage debt through Short Sale or Foreclosure. You see, banks issue 1099s when they forgive an outstanding debt. And normally, a home owner would be claiming the amount forgiven (the amount stated in the 1099) as income. Not everyone qualifies under the guidelines of the act, but those that do will need to realize that timing is everything if they are considering selling their Northern Virginia home in a Short Sale.
It is also important to note that a home owner who fell under the protection of the federal income tax relief provided by this law would also be exempt from state tax under the same law in the Commonwealth of Virginia. Virginia falls in line with federal guidelines.
So if you've been thinking of selling your Northern Virginia home in a Short Sale, consult your tax adviser about whether or not you qualify under the Mortgage Debt Relief Act. If you do, make your next call to me. I'm an experienced Northern Virginia Short Sale Agent that can get the job done before the act expires in December 2012. Timing is everything in conducting your Northern Virginia Short Sale.
Chris Ann Cleland, Associate Broker-Licensed in Virginia, Long & Foster REALTORS®
703-402-0037, ChrisAnn@LNF.com, www.NVARealEstate.net
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