Mortgage Forgiveness Debt Relief Act Extended

By
Real Estate Agent with RE/MAX Dallas Suburbs TX Broker 0513551

TaxesThe 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.

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Originally posted at http://www.thebranchteam.com/wordpress/2013/01/02/mortgage-forgiveness-debt-relief-act-extended/

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Tom Branch and Gina Branch, The Branch Team with RE/MAX Dallas Suburbs, service the greater North Dallas suburbs including Dallas, Plano, Allen, McKinney, Frisco, Lewisville, and Carrollton.  While Gina concentrates on traditional listings and buyer/tenant representation, Tom specializes in assisting distressed homeowners to avoid foreclosure.  Tom and Gina have published two books (Achieving Rock Star Status and The Field Guide to Short Sales) and are available for speaking engagements in the greater Dallas - Fort Worth Metroplex. Subscribe to The Branch Team Blog.

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Ambassador
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Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Tom...

This is great news for those that were unable to close their short sales before the end of calendar 2012! Now we can move forward from here.

Featured in the Group "Whacked!!!"

Jan 01, 2013 11:09 PM #1
Rainmaker
863,906
Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

Tom - this is great news for the continued sustainability and improvement of the housing economy.

Jan 02, 2013 01:14 AM #2
Rainmaker
508,557
Jim Patton
Aspire Home Real Estate 209-404-0816 - Modesto, CA
Realtor - Stanislaus ,Merced, San Joaquin Counties

This is very good news Tom.  I had a few very nervous sellers.  

Jan 02, 2013 07:39 AM #3
Rainmaker
504,894
Teral McDowell
Referral Patners LLC - Murphy, TX

Good news indeed for those homeowners who find themselves in a short sale and needing relief.

Jan 02, 2013 01:47 PM #4
Rainmaker
1,342,185
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Tom - This is really great news for those homeowners and while I was confident that it would get extended you just never know.

Jan 02, 2013 11:38 PM #5
Rainmaker
255,214
Monica Hill
RE/Max Associates - Wilmington, DE
the REALTOR to help you discover Delaware

Tom, It's good news that it got extended but it's crazy that it has an expiration date. It makes no sense to me to ever tax someone based on money or assets that they don't have. 

Jan 03, 2013 11:28 PM #6
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Tom Branch
RE/MAX Dallas Suburbs - Plano, TX
Broker, CDPE, SFR, ACRE, Plano TX Ambassador

Monica,

The IRS feels that since the lender wrote off the debt that someone should pay taxes on the "gain" hence the 1099C.

Tom

Jan 04, 2013 12:10 AM #7
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