Friday, December 20, 2013 - Article by: Gary W Smith - MLO#53963 - Aspire Lending - NMLS#137773 -
Sellers currently selling under a short sale can breathe a sigh of relief this morning as they will not have to pay income tax on the amount of debt forgiveness when selling their home. Late last night, Congress reached a settlement as part of the fiscal cliff negotiations. The Mortgage Forgiveness Debt Relief Act of 2008 has been extended for another year. The measure will continue to exempt from taxation mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale, loan modification (including any principal reduction) or foreclosure.
This is good news as the industry winds down the homes for sale that fell in value during years past. With home values rising, their should also be less people faced with being underwater.
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