The Mortgage Forgiveness Tax Relief will be expiring at the end of 2012, unless Congress votes to extend it. As one who has seen the devastation brought upon homeowners in distress feel it is important to extend this deadline until after our housing market has recovered.
Without the extension of this Act, distressed homeowners who are selling their properties as short sales, or modifying their mortgages, are subject to IRS tax due to this “phantom income” bestowed upon them. Phantom, because it’s money they never see. Say for instance you sell your home for $40,000 less than you owe, without the Mortgage Forgiveness Tax Relief Act you would owe taxes on the $40,000 despite the reality of never having your hands on that cash!
No taxpayer should be forced to pay tax on money they’ve already lost with cash they never received.
Considering the fragile condition of distressed homeowners and the real estate market, it is important that we extend the Mortgage Forgiveness Tax Relief.
I will be answering The National Association of REALTORS, call to action. Please do the same. Write or call your Congressman and encourage him/her to extend this Act.
We need to keep housing on the road to recovery. In the past recessions housing has been the the industry to lead us to recovery. Let’s not break that tradition!
About the Author
Kristal has been helping buyers and sellers in Colorado since 1984. She enjoys sharing her knowledge of the Metro Denver Real Estate market via blogging and in person while driving around the beautiful Rocky Mountain town of Denver! For fun, Kristal enjoys shooting things with a Canon. Visit Denver Photo Blog