In mid-July we shared information on the as an option for underwater homeowners looking for a way out of their mortgage. The legislation created an exemption in the IRS tax code to forgive mortgage debt incurred by foreclosure, short sale or deeds in lieu of foreclosure settlements. At the time of our initial post, we discussed how the deadline was quickly approaching, as the law is set to expire on December 31, 2012.
On August 2, 2012, the Senate Finance Committee approved a bipartisan bill that would extend the Mortgage Forgiveness Debt Relief Act through 2013 and also include energy-efficiency tax credits for remodeling and home construction. The bill will now move to the full Senate for possible action, and with the upcoming presidential election experts feel this will be a hot topic of discussion as struggling homeowners look for extended debt relief. Without a formal extension by Congress, all mortgage balances written off by banks in 2013, would be fully taxable as of January 1.
If you would like to discuss your real estate law questions and options, you may call (321) 282-1055 to schedule a free consultation with Justin Clark at Gregory and Clark Attorneys At Law.