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How to Avoid Paying Taxes on Forgiven Mortgage Debt

By
Services for Real Estate Pros with Think Glink Media

If you have recently gone into foreclosure or completed a short-sale, you could owe a big chunk of change to the IRS in your forgiven debt. However, you can avoid paying these taxes right now while doing a Home Affordable Modification Program (HAMP).

As part of HAMP, your principal balance will be reduced for over three years, as long as you make your payments on time. Keep in mind that if the IRS makes changes to this program in 2014 you might owe tax on that principal reduction.

You can avoid paying these potential taxes by claiming all principal reduction on your 2013 tax bill rather than spreading it out over three years. That way, if the tax laws do change, you'll be protected.

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Comments (3)

Helen and Larry Prier- Re-Max Gateway - Residential Real Estate
RE-MAX Gateway- Residential Real Estate Sales - Anacortes, WA
Anacortes & surrounding Skagit & Island Counties

Ilyce, Love your video and very interesting. What editing program do you use to have the graphics next to you on the screen.  I will be following you on your minute tips.

Aug 08, 2013 02:31 AM
Ilyce Glink
Think Glink Media - Chicago, IL
Best-selling author, award-winning TV/radio host.

Hi Helen and Larry,

Thanks for watching the video - I'm glad you enjoyed it. We use Photoshop to create the images and Final Cut Pro to put them into the video. You can find a complete list of my Real Estate Minute videos on my YouTube channel. Let me know if you're interested in hosting an ad-free version of my videos on your site. 

Enjoy your weekend.

Aug 09, 2013 05:29 AM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Ilyce, pretty informative video for about a minute only for HAMP. Nice post - thanks for sharing.

Aug 11, 2013 02:27 PM