The Mortgage Debt Relief Act provides special tax relief for some homeowners who have lost their homes due to Foreclosure or Short Sale. If you are currently at risk of losing your home to Foreclosure or Short Sale, you need to carefully consider how this law can impact your situation.
Here are some of the specifics:
Homeowners who lose their home to Foreclosure or Short Sale are usually taxed on the difference between what their home sold for and how much they owed on their home. This tax bill could easily equate to thousands and thousands of dollars. This is a huge hardship to former homeowners who are struggling to recover financially from losing their home.
The Mortgage Debt Relief Act provides some relief for these homeowners. The amount of the mortgage that was forgiven is not taxable if the homeowner secured their loan prior to 2009, used the home for their primary residence and had a loan of less than $2,000,000. Please note that this law is set to expire on December 31, 2012.
December 2012 may sound like a light years away but in the world of Foreclosures and Short Sales, it really doesn’t give homeowners that much time! Trial loan modifications average 14 months and Foreclosures and Short Sales often proceed at a snail’s pace! If you have an inkling that you are headed to a Foreclosure or Short Sale, review your options now so that you can take advantage of the Mortgage Debt Relief Act. It is bad enough to lose your home to Foreclosure or Short Sale. Don’t compound the problems by piling a huge payment to Uncle Sam onto your financial woes.
Confused? Contact your local Certified Distress Property Expert for a consultation. In Greensboro, the Short Sale Expert is Kelly Walters. She is ready, willing and able to help you negotiate through the world of Foreclosures and Short Sales and answer any questions you may have. You may email Kelly Walters or call her directly at 336-253-5079.