San Mateo County Association of Realtors (SAMCAR), 1/2/13. "Mortgage Forgiveness Tax Treatment Gets One More Year"
While there is still very little focus on the importance of this law, the fiscal cliff deal did extend its provisions for one more year.
The Mortgage Forgiveness Debt Relief Act - which expired at the end of
2012 - is crucial to foreclosure mitigation efforts such as principal
forgiveness and short sales. Normally, U.S. law decrees that when a
lender forgives all or a portion of a borrower’s debt, the forgiven
amount is considered taxable income for the borrower. This is known as
Cancellation of Debt (COD) Income and must be included in a taxpayer’s
gross income. This Act, however, created an exception to this rule under
the U.S. Tax Code. The Mortgage Forgiveness Debt Relief Act allows
homeowners who received principal reductions or other forms of debt
forgiveness to not pay taxes on the amount forgiven. The amount extends
up to $2 million of debt forgiven on the homeowner’s principal
residence. For homeowner’s to qualify, their debt must have been used to
“buy, build, or substantially improve” their principal residence and be
secured by that residence. The law, which was passed in 2007 with a 5 year sunset provision, will now be in effect until January 1, 2014.
Paul Stewart
GOVERNMENT AFFAIRS DIRECTORPaul Stewart
Note: The above memo is not yet posted on the SAMCAR website.
Submitted by Jim Wagner
Posted by Kathy Meeh
5 comments:
Wagner, isn't a realtor he is a lender. Where are Pacifica's finest realtors? Sleeping? drinking? drunk? past out?
It's passed out you moron.
That strikes me as a personal attack, but it's so accurate that I vote we make an exception this once.
oh, they're probably on the partee bus looping around pacifica. honk and wave if you can manage both at the same time.
What passed both houses is in reality a tax hike on all of us. That's not a partisan rant, it's fact. Take the time to understand rather than make snide comments.
Some things need some discussion, not meaningless remarks. Of course, I have no doubt this will fall on deaf ears/fingers. Too bad.
And what difference does it make what Wagner does!
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