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Mortgage Debt Forgiveness

Posted on December 2, 2014

iStock_000018780863SmallIf you have not already heard, the National Association of Realtors is calling on its members to help urge Congress to renew the Mortgage Debt Forgiveness Act which in a nutshell is an income tax exemption on mortgage debt forgiven in a short sale.

The act expired at the end of 2014 which means that distressed homeowners are now responsible for paying taxes on “phantom income” from the forgiven debt once the properties are sold. Long story short if the bill is not extended, the tax on a 2014 short sale would be due April 15th next year.

Ultimately, even though there have been improvements in the housing sector, the struggling economy has affected us all and caused many Americans to short-sale their homes. The program was designed to provide stability and create a viable insurance market at virtually no cost to homeowners.

For more information on this or short sales in Destin, Niceville, Fort Walton Beach contact Brad Shoults today.

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