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Debt forgiveness act extended
 
 
For those of you in a facing a foreclosure, principle reduction,   deed-in-lieu of foreclosure,  or short sale. on your home, the debt forgiveness act of 2007 has been extended for another year.
Under the IRS tax code forgiven debt was treated as income subject to federal income tax.  Homeowners who get their mortgage debt forgiven through a short sale, deed-in-lieu or loan modification will not be taxed on the debt forgiven on the amount forgiven up to $2,000,000. 
On Jan. 1 both the Senate and House passed H.R. 8 legislation to avert the “fiscal cliff.” The bill was signed into law by President Barack Obama on Jan. 2.  Below is a summary of real estate related provisions in the bill:
Real Estate Tax Extenders
•       Mortgage Cancellation Relief is extended for one year to Jan. 1, 2014
•       Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012
•       15-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012
•       10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is ... more

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