The American Taxpayer Relief Act of 2012 passed both the House and the Senate over the past couple of days. The bill is on it's way to the White House where President Obama has stated he will sign it into law as soon as possible.
While the primary thrust of the bill was to prevent massive tax increases there were a number of "extenders" in the bill as well.
According to the National Association of REALTORS®, "Of most interest to real estate, the bill would extend mortgage cancellation relief for home owners or sellers who have a portion of their mortgage debt forgiven by their lender, typically in a short sale or foreclosure sale for sellers and in a modification for owners. Without the extension, any debt forgiven would be taxable, which, for underwater households, represents a financial burden."
This is good news for many Americans who are working through a short sale, deed-in-lieu, or a foreclosure. Without an extension of the Mortgage Forgiveness Debt Relief Act, many of these people would have owned thousands of dollars to the IRS as a result of the distressed sale of their primary residence.
Have questions about short sales? Contact us at 214-227-6626.
Photo: Licensed from iStockPhoto
Originally posted at http://www.thebranchteam.com/wordpress/2013/01/02/mortgage-forgiveness-debt-relief-act-extended/