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

 

Chris Ann Cleland, Associate Broker- Licensed in Virginia, GRI, SFR, Northern Virginia Short Sale Specialist. Affiliated with Long & Foster, 7526 Limestone Drive, Gainesville, VA 20155.  To contact Chris Ann, call 703-402-0037 or email chrisann@LNF.com.  Or you can visit her website:  www.nvarealestate.net.

Header photos taken by Chris Ann Cleland.

The opinions expressed in this post are those of Chris Ann Cleland, not those of Long & Foster REALTORS®.

 
This post has been included in Virginia Real Estate News Prince William County, VA Real Estate News Bristow, VA Real Estate News
Post is included in group: Realtors®
Post is included in group: Short Sale REALTORS®
Post is included in group: Short Sales Specialists
Post is included in group: Short Sale Support Group
Post is included in group: Virginia Foreclosures Short Sales and REO (and Pre-Foreclosures)

9 Comments on To Avoid Potential Tax Ramifications of a Northern Virginia Short Sale, Timing is Everything

OCT
24
2011
702,236 Points 55 Featured Posts Outside Blog Called Shot Master

Chris Ann this is fantastic for you to alert everyone but horrible for home owners. Thank you for the heads up, i will be spreading the word now, as home sellers on the bubble deciding to or not to, need to get their homes on the market now.
5:10pm • #1
958,432 Points 24 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Get going on that short sale. If only they would do this for investment properties too.
10:22pm • #2
OCT
25
2011
794,539 Points 80 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Great reminder for potential sellers still sitting out there and not working with the Northern VA short sale agent Chris Cleland...
8:08am • #3
225,140 Points 20 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Time to get on it, time is ticking.  I hope you get a flood of Q4 short sale listings and closings.
8:12am • #4
1,515,948 Points 112 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Scott:  I am hopeful the government will extend it, but you just never know.

Ellie:  There's a lot of things in these rules and regulations that don't make much sense.

Ginny:  I think there will be a new wave of inventory came January that will be all Short Sales.

Coral:  If there's someone out there that needs help, I'm happy to provide it.
10:23am • #5
982,961 Points 106 Featured Posts Localism Sponsor Outside Blog

I've had a couple of short sales that took 2 years to close, so I tell everybody to get started now. It's possible they might extend the Mortgage Forgiveness Debt Relief, but there is never a guarantee.
10:35am • #6
1,515,948 Points 112 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Elizabeth:  Exactly.  Don't count on anything where our elected officials are involved.
10:50am • #7
OCT
26
2011
652,568 Points 49 Featured Posts Localism Sponsor Outside Blog Called Shot Master

It would be nice if they extend this. But, one can't bet on that happening. Right now time is of the essence!
8:38am • #8
1,515,948 Points 112 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Jackie:  Better to be safe than sorry.
10:49am • #9


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Chris Ann Cleland, Associate Broker, Northern VA

Bristow, VA

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Long & Foster REALTORS®, Gainesville, VA

Address: 7526 Limestone Drive, Gainesville, VA, 20155

Office Phone: (703) 402-0037

Cell Phone: (703) 402-0037

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