Mortgage Forgiveness Debt Relief Act of 2007 is set to expire.
What does this mean to sellers selling their Jacksonville Home as a Short Sale?
If you're not familiar with the Mortgage Forgiveness Debt Relief Act of 2007, this went into effect December 2007. Before this came about, if you were to sell your house short, the balanced that your lien holder did not collect was considered income, and would be taxable. You would receive a 1099 in January or February after the home had closed. But the Mortgage Forgiveness Debt Relief Act allows you to exclude certain canceled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. There are some conditions, so make sure you either talk to your CPA or visit the Mortgage Forgiveness Debt Relief Act of 2007 page. This relief act is set to expire December 2012.
Currently President Obama proposes extending tax waiver on mortgage debt forgiveness in his budget proposal of 2013. So, will this be extended? I hope so, but there are some opposition in Congress, who may put up a fight.
What does this mean to the sellers needing to short sale their Jacksonville Florida Home?
First, you need to weigh out your options. Have you tried a loan modification, can you catch up your payments if you're behind, is bankruptcy an option? If you feel that a short sale would help your situation, then you need to speak to a real estate agent, who has experience in listing and selling short sales, to see if a short sale is the way for you to go.
I hate saying, don't wait, because this may not be extended, cos really, it makes me feel like a high pressured sales person, and I'm not, but you know as well as I do, that our government will wait til the last minute to make these decisions, and if it turns out that the extension does not happen, you will be looking at a higher tax bill when you do short sale. Also, short sales take time, so you need to give yourself some cushion.
If you're look for an agent in Jacksonville or surrounding areas, who does short sales, I'm one, who is not afraid to get to work to get your home sold. I can't promise a stress free ride, and maybe after we speak, you find that doing a short sale may not be in your best interest. It will be your decision and if selling is what you decide, I will work on getting your short sale closed as if it were my own.
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