Among other things, the new law extends the tax deduction for mortgage insurance premiums and retains the prohibition on taxing
forgiven mortgage debt as income.
Not exact matches
(3) You may owe taxes on the amount of
forgiven debt from the short sale: although there is some recent federal law that may remove your tax obligations from a short sale, you should be cautious that the amount of the
forgiven loan is not reported by your
mortgage company
as income to you.
If the bank sells your home for less than the amount left on your
mortgage, any
forgiven debt can be treated
as taxable income.
Cancellation of taxable income applies to
debt reduced through
mortgage restructuring,
as well
as mortgage debt forgiven through a foreclosure, and qualifies for relief of up to $ 2 million ($ 1 million if filing separately).
The Internal Revenue Service announced procedures designed to aid
as many homeowners
as possible who are facing the year - end expiration of a tax provision that excludes from income
mortgage debt forgiven in connection with the Principal Reduction Modification Program (PRMP) and the Home Affordable Modification Program (HAMP).
Currently NAR is supporting the passage of S. 1394, the
Mortgage Cancellation Tax Relief Act, which would repeal the law that requires home owners to pay taxes on
forgiven debt for their principal residents
as part of a short sale or foreclosure.
However, we're hopeful that the act will be extended before it expires on December 31 so sellers don't have to pay taxes on
forgiven mortgage debt, which would be unfairly treated
as income for owners who are selling under duress,» Thomas said.
In addition, with the
Mortgage Forgiveness Debt Relief Act of 2007 not being extended from it's expiration in December 2013, many homeowners do not like the uncertainty or any possibility in having to pay taxes on the forgiven balance of their mortgage that wouldn't be covered when they sell their home as a Sho
Mortgage Forgiveness
Debt Relief Act of 2007 not being extended from it's expiration in December 2013, many homeowners do not like the uncertainty or any possibility in having to pay taxes on the
forgiven balance of their
mortgage that wouldn't be covered when they sell their home as a Sho
mortgage that wouldn't be covered when they sell their home
as a Short Sale.
The IRS will not count the amount
forgiven by the
mortgage holder
as income to the seller, thus giving distressed borrowers incentive to sell short rather than default; (2) restored the tax deduction for
mortgage insurance premiums that expired at the end of 2011; (3) the
mortgage interest deduction untouched; and (4) tax relief for
mortgage debt forgiveness was extended another year; providing homeowners tax relief on loan modifications, short sales and foreclosures.
As Fannie Mae says, never sign over the deed to your house unless you're working with your
mortgage company to
forgive your
debt... or unless you're physically selling your house to that company.
The
Mortgage Forgiveness Debt Relief Act of 2007 creates a three - year window in which the IRS won't count as income any mortgage debt forgiven to a borrower by the lender in a loan modification, refinancing, short sale, or deed in lieu of fore
Mortgage Forgiveness
Debt Relief Act of 2007 creates a three - year window in which the IRS won't count as income any mortgage debt forgiven to a borrower by the lender in a loan modification, refinancing, short sale, or deed in lieu of foreclos
Debt Relief Act of 2007 creates a three - year window in which the IRS won't count
as income any
mortgage debt forgiven to a borrower by the lender in a loan modification, refinancing, short sale, or deed in lieu of fore
mortgage debt forgiven to a borrower by the lender in a loan modification, refinancing, short sale, or deed in lieu of foreclos
debt forgiven to a borrower by the lender in a loan modification, refinancing, short sale, or deed in lieu of foreclosure.