What is tax relief for mortgage debt forgiveness, and is it still available?
For the last few years, the congress allowed a tax relief to those who went through short sales and had their mortgage forgiven! Typically, IRS considers the forgiven amount as a gain and the homeowner is required to pay taxes on the forgiven amount. Till 2013, the law helped waive that taxation to help those in trouble! On January 1, 2014 the provision expired and put the tax burden on every homeowner who took advantage of this mortgage relief!
The good news is that the Congress has passed the bill for an extension of this provision, including some other bills, and Senate hopefully will do the same soon! Thanks to NAR (National Association of Realtors) for working on behalf of the consumers to make this happen!
Need more clarification on this and how this works? Ask us! We can be reached at 732.494.2211. And for how it will effect you exactly given your circumstances, consult your tax advisor!
Know of friends who may be going through a short sale right now? Tell them about this good news!
Buying, Selling, or Renting, we are here to serve your real estate needs! Call us at 732.494.2211. On Track Realty is a licensed real estate broker in NJ.