The Mortgage Forgiveness Debt Relief Act became law in 2007. This offers relief to homeowners who would owe taxes on forgiven mortgage debt after facing foreclosure. The act extends such relief for three years which now has been extended another year but will end December 31, 2013.
What does this mean to you? If you are thinking about doing a short sale, do it soon, the earlier the better. Some of these sales take 3-6 months to complete so if you don't want to miss out on this tax forgiveness, it is time to get prepared and start the process. To see if you want see if you qualify, please consult with a tax advisor. This protection is limited to primary residences. Contact an agent today!