Half Moon Bay Short Sale- Deadline!
Will the Mortgage Debt Relief Act Extended?
What is it? Here is the IRS definition:
he Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition
In plain terms:
When a person sells their home for less than what they owe on a mortgage, the difference is shifted to the seller by the mortgage lender as INCOME. Income is taxed! Since 2007, that added income has been waived on approved short sale taxpayers. This Act expires in 2012.
Will they extend? Most likely. Team Danny D will keep you posted.
Call Team Danny D for all your options on your distressed home options at 650.400.7670
Danny Dimas ~ broker/owner
Shorty Sale & REO Pro
Team Danny D Realty
El Granada, Ca 94018