Realtor Call to Action – Forgiven Mortgage Debt Tax Exemption Expiring

I have to believe that this is going to be extended, but I'd feel better if they would just do it.

I guess this is going to depend on the outcome of the election.  We will have to see what happens on this issue.

Richard this is important information for homeowners and all citizens.  Thank you for helping to get the word out so that we can take action.

This will depend on the election.  Likewise, the "Bush" tax cuts. Only 1 candidate wants us to keep more of our hard-earned income.

This was mass emailed to all CB agents in SoCal.

Goog cal for action that will benefit our clients.

Richard-There are lots of Bills that should have expiration dates on them but they live on. This seems like it should be extended but it has a termination date. Go figure.

I think it would be really unfair for homeowners after the deadline if this debt forgiveness is not extended.  The homeowner who completes the short sale before 12/31/2012 will have mortgage forgiveness on the shortfall, but not the homeowner who sells after 1/1/2013?

Richard, this is very timely, since there are still a lot of underwater homes out there.  If the exemption does not increase, this will provide a hardship on many good people who just got caught up in a mess.  Politics aside (even though it is election day), it will be interesting to see whqat either side will come up with now.  I am also a CPA and Real Estate Broker and have a small tax practice.  I have had a number of taxpayers who had short sales and were able to exempt the reduction in principal which would have been includable in income.  One client had a 1099-C for $179,000.  To include that in income would not be very good for him, since he did not qualify under the insolventcy exclusion.

Let's hope they correct this problem before the end of the year.  But, I feel, they will probably wait till 12/31 to pass some kind of extension.

The extension of this specific tax forgiveness has nothing to do with whoever wins in the election. It has to do with Congress being willing or not to help people who have lost their homes. Hitting the former homeowner with a monstrous tax bill after they have lost their home to foreclosure or short sale is not the way in which the Congress or any politician ought to seek to cure our national debt.

My guess is it will be extended.  No one would want an increase in bankruptcies and to not extend it will squash the market which seems to be attempting a recovery!

Seems to be a lot of disagreement here about what should be done. Not sure how many homeowners are going to be affected by this, but it seems to need a little more attention. Thanks for the informative links to your more thorough blog postings.

I'm in the group that wants to extend it. The Banks got help. The public needs help.

If it does not get renewed there will be many ripple effects;

1. The number of bankruptcies will skyrocket

2. Banks will lose more money as homeowners will stay in the houses longer while the bankruptcy takes place.

3. The benefit of doing a short sale will diminish, causing more foreclosures in the economy.

4. A resulting spike in foreclosures will decrease market values of surrounding properties.

5. Americans who will not or cannot file bankruptcy will be saddled with massive tax debts which could cause judgments, wage garnishments and more.

I could go on describing more ripple effects, but these listed are depressing enough.