HAPPY NEW YEAR!
To begin 2013, there has been an awful lot of concern among real estate professionals and homeowners regarding the Mortgage Forgiveness Debt Relief Act of 2007, which was set to expire on December 31, 2012.
We are happy to report that the Mortgage Forgiveness Debt Relief Act has been extended through January 1, 2014, by the American Taxpayer Relief Act of 2012 (more commonly referred to as the “Fiscal Cliff”), which was passed both through the Senate and House over the past few days.
SEC. 202. EXTENSION OF EXCLUSION FROM GROSS INCOME OF DISCHARGE OF QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS:
(a) IN GENERAL.-Subparagraph (E) of section 108(a)(1) is amended by striking ”January 1, 2013” and inserting ”January 1, 2014”.
(b) EFFECTIVE DATE.-The amendment made by this section shall apply to Indebtedness discharged after December 31, 2012
This is good news for many local homeowners who are working through a short sale, deed-in-lieu, or a foreclosure.
Read the IRS rules of The Mortgage Forgiveness Debt Relief Act and Debt Cancellation here.
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