If you've been thinking about doing a short sale on your home, you now have more motivation to get the ball rolling. On December 31st, 2012 the Mortgage Forgiveness and Debt Relief Act is scheduled to expire.
Congress passed the act in 2007 for the purpose of helping distressed home owners. Before the act was passed, any forgiven debt on a primary residence was considered taxable income. The act states that if you borrow up to $2 million and the lender forgives the debt, such as in the case of a short sale, you are not responsible for the taxes owed on the forgiven amount. When a short sale is processed, the lender is responsible for providing a Form 1099-C to the IRS, which indicates the amount of debt that is being forgiven.
If the act is not extended, the tax liabilities on borrowers could cause even more of a financial burden for those that are already struggling. Hopefully there will be an extension but there's no guarantee, so don't delay!
You can view the details of the Mortgage Forgiveness and Debt Relief Act here: http://www.irs.gov/individuals/article/0,,id=179414,00.html
With over 6 years of experience in the short sale process and an instinctive ability to understand the needs of her clients, Angel Lynn is your trusted real estate expert. Whether you’re a buyer, a seller, or one of the millions currently in danger of foreclosure, contact us today! We're here to help!
Courtesy of:
nevada.realestaterama.com
mattandrandy.com
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