Mortgage Forgiveness Debt Relief Act

You may have heard about homeowners losing their homes to foreclosure or selling them in a short sale, only to be hit with a tax bill afterwards. The IRS saw the forgiven mortgage debt due to foreclosure, short sale, or deed in lieu of foreclosure as taxable income.

Therefore, the IRS was adding insult to injury and taxing the forgiven amount. This could amount to tens of thousands of dollars for an already financially strapped family.

Thankfully, President Bush signed bill H.R. 3648 into law, on December 20, 2007, that will eliminate the tax up to $2 million on primary residences only. The new ...

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4 comments

#1RichardDecember 24, 2007, 1:59 am

Excellent post,
As home prices and interest rates keep rising, lenders have figured out a way to keep the dream alive for millions of people who want to own their own home. It’s called the 50-year mortgage. Mortgage experts caution that the 50-year mortgage is best-suited for those who plan to stay in their home for about five years, while the loan’s interest rate remains fixed.

#2timDecember 31, 2007, 12:23 am

thank for your sharing , i will consider carefully about these choices ….hope to read more useful information from your blog.

#3Credit Card Debt HelpAugust 1, 2008, 12:21 am

You make some good points in this post. I think things will start getting better towards the end of 09. How have your views changed in the last couple of months?

#4Debt Settlement LawyerNovember 11, 2010, 11:36 pm

Today, when Obama is holding the office, people are praising the steps taken by him for the economic reforms.

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