As part of the American Taxpayer Relief Act of 2012, or the "fiscal cliff" bill, passed by Congress on Jan. 1, a one-year extension has been approved for the Mortgage Forgiveness Debt Relief Act (the "Act").
Created in 2007, the Act has provided homeowners a tax exemption when they obtain debt forgiveness on a primary residence. Prior to the Act, homeowners were taxed on the forgiven debt, known as debt discharge income. Any debt forgiven by a lender is usually considered income and is taxed by the federal government. For example, a person … (1 comments)
Mortgage Forgiveness Debt Relief Act Extended
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