Wednesday, January 2, 2013

Mortgage forgiveness tax debt relief continued until 1/2014

 
 SAMCAR Government Affairs

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 DIRECTOR

Note:   The above memo is not yet posted on the SAMCAR website.

Submitted by Jim Wagner 

Posted by Kathy Meeh

5 comments:

Anonymous said...

Wagner, isn't a realtor he is a lender. Where are Pacifica's finest realtors? Sleeping? drinking? drunk? past out?

Anonymous said...

It's passed out you moron.

Anonymous said...

That strikes me as a personal attack, but it's so accurate that I vote we make an exception this once.

Anonymous said...

oh, they're probably on the partee bus looping around pacifica. honk and wave if you can manage both at the same time.

Paul Gann Ghost Writer said...

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!