The Mortgage Forgiveness Debt Relief Act is due to expire at the end of this year. If you’re struggling with the decision on whether to keep your house, foreclose, or short sale then you might want to factor this legislation into your decision.
Usually, if your property is foreclosed on or you restructure mortgage the IRS requires that you pay taxes on the amount owed as if it was income.
The Mortgage Forgiveness Debt Relief Act, passed in 2007, protects homeowners from paying taxes on their canceled debt.
So it looks like Ben Franklin’s stance on death and taxes might not be so relevant anymore… at least for the next few months.
Here is a quick video from the IRS that explains what you need to know:
If you need help with determining your options with your home, call our office today at 310-482-2035.
