Mortgage Forgiveness Debt Relieft Act gets 12-month extension

Posted by Suzi Karr Realty on Friday, January 4th, 2013 at 4:33pm.

Suzi Karr Realty reports Congress has extended the Mortgage Forgiveness Debt Relief Act through December 31, 2013. The Act relieves distressed homeowners from having to pay income taxes on the mortgage debt forgiven in a short sale, foreclosure, or principal reduction.

Congress passed a bill, The American Taxpayer Relief Act of 2012, as part of a deal to avert the so-called fiscal cliff. This legislation includes extending the Mortgage Forgiveness Debt Relief Act through December 31, 2013. The law impacts homeowners who are granted principal forgiveness on their loan, due to a short sale, a deed-in-lieu of foreclosure, or have lost their home to foreclosure.

Under the federal tax code, all types of forgiven debt are treated as income, subject to regular taxes. Because of the Mortgage Forgiveness Debt Relief Act, homeowners who get their mortgage debt forgiven through either a short sale or loan modification won’t be taxed on the amount forgiven up to $2 million.

This is very important legislation for the Central Florida Region where distressed sales continue to account for over 40% of the residential market and short sales alone currently account for almost 65% of pending transactions.

If you have specific questions about short sales or any other real estate item the Suzi Karr Realty Team can be reached by calling 407-876-3688 or through their website at http://www.SuziKarrRealty.com ;
Spanning five decades, Suzi Karr Realty has set the standard of excellence within Central Florida real estate. Headquartered in Windermere Florida, Suzi Karr Realty covers the greater Orlando area, specializing in premiere marketing of Luxury homes.

Leave a Comment