Short Sale Information CALL 443-790-6918 or visit www.MarylandShortSaleInformation.com If you are in danger of FORECLOSURE and you thinking about a SHORT SALE know your options.
As part of tax bill H.R. 8, which addressed the so called “fiscal cliff,” On January 1, 2013, Congress
passed an extension of the Mortgage Forgiveness Debt Relief Act of 2007.
For distressed homeowners, the extension of this act comes as welcome news, as it means foreclosure
alternatives, such as loan modifications and short sales, will continue to be valuable options free of tax penalties on forgiven debt. This report details how the extension of the Mortgage Forgiveness Debt
Relief Act will save these homeowners thousands in taxes, and what to do if you or someone you know
find yourself facing the possibility of foreclosure.
What Is The Mortgage Forgiveness Debt Relief Act?
The Mortgage Forgiveness Debt Relief Act was originally passed in 2007 to aid the millions of
homeowners who suddenly found themselves in danger of losing their homes to foreclosure following
the housing market crash. Under the Mortgage Forgiveness Debt Relief Act, any debt forgiven in a short sale, foreclosure, or loan modification is exempt from federal taxes.
Here’s how the process worked before the Mortgage Forgiveness Debt Relief Act:
• A homeowner found that he or she could no longer afford his or her mortgage. At risk of default and
foreclosure, the homeowner was able to negotiate with the bank an option that avoided foreclosure
(most likely a short sale or a principle reduction).
• The bank was legally required to report the amount of debt forgiven or cancelled to the IRS.
• The IRS labeled this amount as “income.” Even though the homeowner was never given any cash
from the bank, it was considered income because it was a credit issued to the borrower from the bank
that didn’t previously exist.
• The homeowner was now responsible for paying income tax on this amount, which could amount to
tens of thousands of dollars. With the recent extension of the Mortgage Forgiveness Debt Relief Act, eligible homeowners will continue to remain exempt from these taxes, saving them from paying thousands, or even tens of thousands, in taxes on top of losing their homes.
MORTGAGE FORGIVENESS DEBT RELIEFACT – FREQUENTLY ASKED QUESTIONS:
When does the Mortgage Debt Relief Act Expire? December 31, 2013.
How much debt can be forgiven? $2 million ($1 million if you are married and filing separately.
Does this apply to any debt that is forgiven? No, the Mortgage Debt Relief Act applies only to debt forgiven on your primary residence. Who determines how much debt is forgiven? The lender is required to report any forgiven debt that is over $600.
Will be reported on my credit? If a foreclosure was started, then it probably will be, although it will be less impactful than if the foreclosure is completed.
The G-Team your Maryland Real Estate Connection, is a full-time team with over 22 years of experience. We provide service to our clients in all areas of Maryland. Our areas of specialty include Real Estate in Central Maryland.
We are located in Millersville, Maryland between Baltimore and Annapolis in Anne Arundel County convenient to Fort Meade. We also service Howard, Harford, Carroll & Queen Anne’s Counties and central Maryland. Whether you are BUYING, SELLING, RELOCATING or SHORT SALES.
Call us we can HELP.
If you or someone you know is interested in Buying a home, Selling a home or renting a home, CALL US WE CAN HELP! We provide Experience, Integrity and Solutions to help you through the real estate process. Our website www.MarylandHomeSearchSite.com has all the information you need. It is designed to share info about the community, it’s neighborhoods, real estate trends, housing prices and the ability to create your own search for listings.
Call us at (443)790-6918 or email email@example.com or contact.