Yesterday,
Congress passed to extend the Mortgage Debt Forgiveness Relief Act of 2007 through December of 2013.
Anyone who has debt forgiven as a result of a short sale will not have tax consequences on the forgiven amount as long as:
· They didn’t refi and take money out (unless the money they took out went directly to improve the property)
· The property is their primary residence (or was)
· The property was not used for business or as a rental
· The forgiven amount is less than $500,000 for a married couple and $250,000 for a single person
Mortgage Debt Forgiveness Relief Act----This is great news!
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