The United States Senate and House has passed the 2013 American Tax Payer Relief Act. In section 202, the bill calls for the Mortgage Debt Relief Act to be extended until 1/1/2014.
This is fantastic news for any homeowner who is underwater and needs to sell a property, but was worried about the tax implications of a cancelled debt. Information about the Mortgage Debt Forgiveness Act can be found on http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt-Relief-Act-and-Debt-Cancellation (the news is still very new and the IRS will need time to update their website, but the original information is available on that link).
Homeowners in difficult situations are faced with difficult decisions, whether to walk away from their "promise" and foreclose on the property or to work through a short sale. The Mortgage Debt Forgiveness Act offers homeowners a dignified transition out of their property. In a short sale, they are able to negotiate the terms of the short payoff. In most cases they are able to have the lender(s) forgive their deficiency.
If we can answer any short sale questions for you, please call our office at (916) 295-4888.
This post was contributed by a community member. The views expressed here are the author's own.
The views expressed in this post are the author's own. Want to post on Patch?