Why Closing Your Short Sale in 2012 is So Crucial for Sellers!!
This important information is for homeowners who are contemplating a short sale of their principal residence.
FEDERAL LEVEL: 
The Mortgage Relief Act of 2007 generally allows taxpayers to exclude income for the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. (This includes short selling of a principal residence.) This provision applies to debt forgiven in calendar years 2007 through 2012.
STATE LEVEL: On April 12, 2010, SB 401, the Conformity Act of 2010
was enacted. It allows taxpayers who had all or part of the loan balance on their principal residence forgiven by their lender to exclude the forgiven debt from California gross income. The new law applies to discharges of qualified principal residence indebtedness on or after January 1, 2009 and before January 1, 2013.
***Homeowners who are considering a short sale of their personal residence should have their short sale completed by December 31, 2012 to take advantage of the Federal Mortgage Relief Act of 2007 and the State of California's Conformity Act of 2010.***
For complete information on debt forgiveness please research the following Federal and State links:
FEDERAL: http://www.irs.gov/individuals/article/0,,id=179414,00.html
STATE: https://www.ftb.ca.gov/aboutFTB/newsroom/Mortgage_Debt_Relief_Law.shtml
Prior to proceeding with a short sale, Sellers are strongly urged to consult with a Certified Public Accountant, Credit Consultant, and/or Attorney specializing in real property, taxation and bankruptcy issues.
If you require more information or would like to discuss options available to you please contact us here at THE JOE SOPO TEAM!
IMPORTANT NOTICE: Joe Sopo and Keller Williams Realty are not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.
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