This week, Congress passed the "American Taxpayer Relief Act of 2012" which extends the income tax exemption on forgiven mortgage debt for one year. This means that homeowners who short-sell their principal residence and are forgiven the obligation to repay some or all of the unpaid balance may exclu…de the qualified cancelled debt from their taxable income. This should serve to promote short sales in the coming year as it will enable homeowners to continue seeking forgiveness of mortgage debt in a short sale without being taxed for it. The exemption also applies to any qualified debt forgiveness in a loan modification, refinance, or foreclosure.
Important to Know…
Posted on January 11, 2013 at 5:32 pm Shelia Simmons