The Mortgage Forgiveness Debt Relief Act Set to Expire on Dec 31 2012 - Marshall Carrasco, Reno NV
12-Apr-2012 | News-Press Release
If you’ve been thinking about doing a short sale on your Reno Nevada home, you might want to hurry up. The time is limited for homeowners who want to ensure they aren’t hit with a big tax bill because they had to walk away from a mortgage obligation. The Mortgage Forgiveness Debt Relief Act is set to expire on December 31, 2012.
The Mortgage Forgiveness Debt Relief Act was introduced in Congress on September 25, 2007, and became law on December 20, 2007. This act generally allows taxpayers to exclude income from the discharge of debt on their principal residence. This act offered relief to homeowners who would formerly owe taxes on forgiven mortgage debt after facing foreclosure.
The Mortgage Forgiveness and Debt Relief Act applies to debt forgiven in calendar years 2007 through 2012. It has not yet been determined if the Mortgage Forgiveness Act will be extended past 2012.
In summary, the Mortgage Forgiveness Debt Relief Act states that if you borrow money (up to $2 million dollars) from a bank or a commercial lender and the lender cancels or forgives the debt (a.k.a. Short Sale) then you are not responsible for paying taxes on the forgiven amount. This applies only to primary residences, NOT investment properties.
Upon the completion of a successful short sale transaction, your bank is required by law to provide the IRS with a Form 1099-C. The 1099-C will show the IRS the amount of debt which was cancelled or forgiven. Before December 20, 2007, (this is the date which the Mortgage Forgiveness Debt Relief was enacted) the amount of forgiven debt was considered to be taxable income. This is no longer the case for primary residences; however, all this could change if the Mortgage Forgiveness Act is not extended. Please click the attached link to view the Mortgage Forgiveness Debt Relief Act as it appears on the IRS web site (click link) http://www.irs.gov/individuals/article/0,,id=179414,00.html
Marshall Realty is here to to help you avoid foreclosure. Marshall Realty provides Short Sale, Foreclosure and Real Estate Services in Reno, NV. So, if you are having difficulty in paying mortgage and wants to know your options to avoid foreclosure or have any questions on short sale then call us directly at (775) 787-7400.
Marshall Carrasco is a short sale expert and owner of Marshall Realty. Marshall Realty provides Short Sale, Foreclosure and Real Estate Services in Reno, NV. A top producer in the Washoe area, Marshall has been successfully helping his clients to purchase and sell homes for over 14 years. Find relevant articles about short sales, foreclosure, and loan modifications at RenoHelp.org.
9740 S. McCarran Blvd #103
Reno, NV 89523
Phone: (775) 787-7400
Website URL : http://marshallrealty.net/
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