Upside-down on your Mortgage? Welcome to the Majority!
Can you benefit from the Mortgage Forgiveness Debt Relief Act? Well, that depends on if you have already had any mortgage debt 'forgiven' or 'discounted' since 2007.
If you're still looking for a way to get the debt forgiven in the first place, you should read more about 'loss mitigation' or 'mortgage modification' instead. However, if you've already had your debt reduced, and are still worried about the huge amount of taxes you still owe on that debt, keep reading.
Under current law, if you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable. It looks just like income to Uncle Sam!
In 2007 the United States IRS announced the Mortgage Debt Relief Act, to allow taxpayers to exclude income from 'forgiven' debt on their primary residence. This isn't exactly an official law, so to speak, and is actually only in effect from 2007 until 2012.
Another limitation includes a $2 million cap on the amount forgiven. It's clearly not for everyone, but since the debt reduced from loss mitigation or loan modification, as well as mortgage debt forgiven from a foreclosure qualifies for this relief, it affects many people today.
This page will host the latest news on the Mortgage Debt Relief Act. Keep reading below to keep up to date on this important new public policy.
Discount Mortgage Relief Reviews
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Question: Mortgage relief fund?
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Question: Does the mortgage debt relief act apply to people who refinanced?
I hear 2 versions of this story. That the canceled debt from my short sale this year will NOT be considered income and others say it will be because a refinanced and made it a recourse loan. My CPA [...]
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