The Mortgage Debt Relief Act is About to Expire!
Posted by New Home Resource on August 23, 2012 in
The Mortgage Debt Relief Act is soon to expire! And Congress has not mentioned a word about extending it….. NOW is the time to get your short sale completed!
Let me first remind everyone that we’re not attorneys, and do not profess to understand this Act nor the law it its entirety. Seek professional legal and tax advice for any and all of your questions or concerns!
In a short sale, debt “forgiven” by the lender is subject to income tax, because it is treated by the IRS as regular income. With Las Vegas prices as they were during the “Boom Years” of 2004-2007, this figure is astronomical for most homeowners; hundreds of thousands of dollars in forgiven debt could be considered taxable income.
The Act relieves qualifying homeowners from the obligation of paying taxes on mortgage debt forgiven from a short sale or foreclosure.
First enacted in 2007, the MDRA was extended once in 2009, but is set to expire this year on 12-31-12. This means your short sale must be CLOSED by then, or any forgiven debt could be taxed as regular income. There is qualifying criteria associated with the Debt Relief Forgiveness Act, so please seek professional legal and tax advice to see if you qualify.
Potentially millions of people could find themselves liable for a huge tax bill if the government doesn’t renew the MDRA by the end of 2012. This bill may expire! Since many short sales take an average of six months to complete, homeowners are simply running out of time. Those considering a short sale of their home need to act QUICKLY (like today!) in order to take advantage of a potential tax break.
Real Estate Brokers who are “Certified Distressed Property Experts” (CDPE) have undergone additional training specific to short sales. The Broker at New Home Resource, Joanna Piette, is a Certified Distressed Property Expert / CDPE, and she can help.
Contact a professional Realtor® at New Home Resource today at 702-365-1000. We will help you get through this!!