MORTGAGE DEBT RELIEF ACT SET TO EXPIRE

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Real Estate Agent with Exit Realty Group

Mortgage Debt Relief Act Set To Expire 

Considering a short sale on your home, homeowners will need to act quickly in order to take advantage of a tax break since the Mortgage Debt Relief Act is set to expire. There has been no indication as to whether Congress will extend the deadlines at this point. Short sales that settle the debt for less than what is owed, homeowners end up with forgiven debt, however, this may be considered income by IRS and subject to income tax. Currently, as part of the Mortgage Debt Relief Act there is a homeowner exemption which allows taxpayers to exclude income on forgiven debt on their home. To qualify for the tax exemption presently is through a reduced loan modification, as well as debts forgiven with a short sale or foreclosure. The deadline for the Mortgage Debt Relief Act is January 31, 2013 for short sales in order to qualify for the tax exemption. The process must be fully completed by said date. A short sale can take from 4 to 6 months to close since many lenders have now streamlined their process, however, homeowners who wish to take advantage of the tax exemption before its too late. Seek advice from a CPA or another tax professional before completing a short sale since the tax codes for dealing with the debt forgiveness tax exemption may be complicated. 
Bernardsville NJ Real Estate Solutions - Holly Pring CDPE, SFR, Broker/ Owner
I specialize in helping buyers and sellers through the process of homeownership in Central New Jersey including Bernardsville, Basking Ridge, Bridgewater, Bedminster, Peapack Gladstone, Far Hills, Madison, Summit, Chatham, Short Hills, Tewksbury Township, Mendham, Chester, Long Valley, New Providence, Berkeley Heights, Stirling, Gillette, Warren and the surrounding areas (908)-303-0478

 

 
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