Short Sale Sellers – Mortgage Forgiveness Debt Relief Act ends December 31, 2012
Published On: June 28, 2012 Posted by: TownsRealty
Since 2007 Florida homeowners who struggled financially have saved a lot of money with the federal tax break called the Mortgage Forgiveness Debt Act Relief. Now the Act is almost at its end.
The Mortgage Forgiveness Debt Relief Act is meant to save tens of thousands of dollars for homeowners that are selling their homes through a short sale or who are in foreclosure and have the unpaid balance of their loan forgiven by the bank. If so, that debt would be considered taxable income. The Mortgage Forgiveness Debt Relief Act excludes that income from being taxed through Dec. 31, 2012.
If you are considering a short sale there are only 6 months left to put it on the market and sell it before December 31, 2012. When the Act ends, homeowners will have to pay taxes on any unpaid balance forgiven by a lender after a short sale, modification or foreclosure.
Although a bill called the “Homeowners Tax Fairness Act” was filed in March and is asking for an extension on the tax debt forgiveness program through 2015, that bill requires congressional approval.
If you need to short sale your home and/or even if you are in the early stages of foreclosure, call Towns Realty. We have closed hundreds of short sales and can help you.