IRS

Homeowner tax cut extended; forgiven mortgage debt excluded from taxable income

Homeowners (Nationwide) have one more year to complete a short sale and benefit from a federal tax break that was set to expire Tuesday.

Tucked into the 157-page legislation that saved the nation from the worst of the fiscal cliff is an extension of the Mortgage Debt Relief Act, which allows borrowers to exclude loan debt forgiven in a short sale, foreclosure or loan modification from counting as income on their taxes.

The act has saved struggling Floridians untold millions since it began in 2007. Tuesday’s approval of the American Taxpayer Relief Act of 2012 extends its deadline to Jan. 1, 2014.

“It’s an enormous relief,” said Sherry Lee, broker/owner of Lee Property Sales in West Palm Beach. “My Christmas and New Year’s was spent consoling sellers and trying to talk them through that process of realizing the act might not be extended and what that means.”

Rest here…

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