Proposed Extension on Mortgage Debt Forgiveness (Short Sales)

By
Real Estate Agent with Keller Williams Realty, Knoxville-West 319217

 

This is a "no-brainer" if you ask me! It would have a very positive impact on those who complete a short sale on their mortgage. It keeps homeowners from having to pay income tax on the debt forgiven by their lender. This Act has been quite beneficial for those we've helped close short sales for over past few years.


Obama Proposes Extending Tax Waiver on Mortgage Debt Forgiveness

02/15/2012 By: Krista Franks Brock, DS News.com


Obama’s FY2013 budget proposal includes an extension of the Mortgage Forgiveness Debt Relief Act of 2007.

The Act ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.

Without the Mortgage Forgiveness Debt Relief Act, debt reduced through mortgage modifications or short sales qualifies as income to the borrower and is taxable. Under the act, up to $2 million in debt elimination can be tax-free.

In the Treasury’s Green Book, its summary explanation of the administration’s budget proposal, it calls for an extension of the tax break due to “the continued importance of facilitating home mortgage modifications.”

The administration is proposing an extension that would apply to any amounts forgiven before January 1, 2015.

At that point, the government would reassess the market and determine whether another extension is appropriate.

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Tags:
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Rainer
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Mark Artesani
Keller Williams Realty - Fountain Valley, CA
Huntington & Newport Beach, Fountain Valley Homes

John,

This a no brainer which no brain is what i think is the problem most of the time in Washington

Feb 23, 2012 12:55 AM #1
Rainer
152,649
House Hunt
HouseHunt.com - Huntington Beach, CA

I am really curious what other agent's think of this proposal.. It sounds good to me given so many homeowners are in a stressed situation.

Feb 23, 2012 01:35 AM #2
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Rainer
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John Verdeaux

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