Recent news just surfaced that now you may owe federal income taxes in 2013 if you have a Short Sale or Foreclosure.
Clients need to realize that now may be the time to walk away from their underwater home!
Uncle Sam is giving homeowners until December 31st, 2012 to go through a Short Sale with no tax consequences.
However, things are going to change starting January 1st, 2013. The new rule is: The amount a lender forgives, either in a Short Sale or Foreclosure, on a primary residence will be taxable on federal income taxes.
So if a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 if they’re in the 25 percent bracket; $7,500 if in the 15 percent tax section.
I fell that this i going to be a HUGE issue - and it's going to shock most taxpayers after 2012.
What are your thoughts on this new rule, Do you think it's a good point to help our clients Short Sale their house now?