Short sales are dead right?

I know the real estate market "feels" good right in the areas I service currently. Property value has increased, interest rates still competative, more buyers than sellers so there is a nice "buzz" around real estate. I want to reach out to the homeowner right now that is underwater, behind on payments, still trying to make a decision on what to do. Please not The Mortgage Relief Act is set to expire at the end of December. What is the mortgage relief act and what does it mean to you? I'm glad you asked that question: The mortgage relief act allows the homeowner that successfully completes a short sale not to be responsible for capital gain taxes. Capital gain? If I sell my home as a short sale I do not gain any money? Well in the eyes of the IRS you do. If you owe $400,000 on your home and sell it for $300,000. That $100,000 of debit foregiveness according the IRS is a taxable gain because you did not have to pay it back and WITHOUT the mortgage debit relief act you COULD be facing taxes on that $100,000 difference! In addition to this, I am experiencing the length of time it is taking short sales to close longer than previous months so it is very likely your short sale may take 6 months to close. If The Mortgage Debit Relief act were to expire, it could expose you to taxable income and BEFORE you dismiss this as the government will just extend the legislation consider this: The real estate market, stock market have turned around (compared to were we are) and the PERCEPTION is the economy is improving. It that is the case there is a very strong srguement the government has no reason to extend the legislation.......hmmmmmm just a thought.