An extension in the Mortgage Forgiveness Debt Relief Act?
Posted by MARK Z. Home Selling Team on Monday, August 20th, 2012 at 10:00am.
The end of the year means the expiration of the Mortgage Forgiveness Debt Relief Act of 2007. This legislature generally allows taxpayers to exclude income from the discharge of debt on their primary residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven through a foreclosure, qualifies for the relief. Up to $2 million of forgiven debt is fit for the exclusion. It is understandable why homeowners in debt are concerned about this impending expiration.
This is important to today market for the reason that without an extension, many homes will be listed as short sales on the market before the end of the year to avoid the tax consequence of a foreclosure.
Recently, DSNews reported:
“Obama’s FY2013 budget proposal includes an extension of the Mortgage Forgiveness Debt Relief Act of 2007…
In the Treasury’s Green Book, its summary explanation of the administration’s budget proposal, it calls for an extension of the tax break due to “the continued importance of facilitating home mortgage modifications.”
The administration is proposing an extension that would apply to any amounts forgiven before January 1, 2015.''
Although the passage of a budget proposal seems unlikely, we can be thankful that it appears both parties are in agreement for an extension of this legislature.
Print
ShareBe the first to comment on this blog entry!
