SHORT SELL NOW – DON’T LOSE A VALUABLE INCOME TAX EXEMPTION!
Last Updated on February 6, 2024 by wyckofflaw
IMPORTANT! THE MORTGAGE DEBT FORGIVENESS DEBT RELIEF ACT SUNSETS AT THE END OF THIS YEAR (2012)
If you or someone you know owes more on your/their primary residence mortgage than the home is worth, you should be aware that the law currently in effect that is very good for you financially EXPIRES IN A LITTLE MORE THAN SIX MONTHS from now.
As a general rule, the Internal Revenue Code treats the amount of canceled/forgiven debt as ordinary income to the taxpayer. Congress, however, enacted The Mortgage Debt Relief Act of 2007 which generally allows a home owner to exclude as income a cancellation/forgiveness of debt on their primary residence. Up to $2MM of such debt may be eligible for this exclusion.
As we know from experience, depending on the facts and circumstances surrounding a short sale, they can take quite a while to market, sell, negotiate and close.
Also, it is very important to understand that the BANKRUPTCY laws DO NOT generally EXTINGUISH obligations the debtor/taxpayer owes to the IRS.
Thus, if you or someone you know has been considering a short sale, NOW IS THE TIME to start the short sale process thereby saving you as much as 10’s of thousands of dollars!
LEGAL – THIS POST IS NOT INTENDED TO BE NOR SHALL IT BE DEEMED TAX ADVICE – I am a real estate and business lawyer that handles short sales, loss mitigation, asset protection, foreclosure defense and other work-out solutions as well as many other matters related to real estate, business and other areas of the law. I AM NOT A TAX LAWYER, CPA, or ACCOUNTANT. As such, you should always consult with a CPA when seeking advice on tax matters.
Michael D. Wyckoff, Attorney, Sarasota, Florida
Wyckoff Law Firm, P.A.
941-795-6565
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