Patti Phillips
Prudential California Realty
6119 La Granada
Rancho Santa Fe, CA 92067
Direct toll free: 800-680-9133
Cell: 619-507-2100 Office: 858-481-2020
www.PattiPhillipsRealEstate.com

Sunday, March 9, 2008

Mortgage Debt Forgiven!

Mortgage Debt Forgiven

Thanks to legislation passed by congress, effective Jan 1, 2008, distressed homeowners will not be required to pay taxes on mortgage debt written off or forgiven as part of a bankruptcy, short sale, foreclosure, or renegotiation that involved the homeowner’s principal residence. Under the Mortgage Forgiveness Debt Relief Act of 2007, up to $2 million of indebtedness is shielded from taxes if the debt is the result of construction, acquisition and major improvement of the principal residence. (Use caution if you refinanced your home and drew money out. Ask a tax specialist whether you may be taxed in this circumstance.) The act applies to debt discharges from Jan. 1, 2007, through Dec. 31, 2009. (Found in California Real Estate magazine, Mar. 2008)

1 comment:

Tax Debt Relief said...

This is great news related to Tax Debt Relief that distressed homeowners will not be required to pay taxes on mortgage debt written off or forgiven as part of a bankruptcy, short sale foreclosure or renegotiation that involved the homeowner's principal residence. I further suggest one must pay the taxes in advance.