As we head into October and the fourth quarter of this year, Academy Mortgage wants to remind owners of Atlanta real estate that the Mortgage Debt Relief Act of 2077 is set to expire at the end of 2012.
What affect would the expiration have? If you owe a debt to someone and they forgive or cancel that debt, the canceled amount may be taxable. The Mortgage Debt Relief Act of 2007 usually allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt forgiven in connection with a foreclosure and debt reduced through mortgage restructuring qualifies for this relief.
The provision applies to debt forgiven between 2007 and 2012. In other words, if this act is not extended, sellers could owe taxes on the difference with what they owe and what they short sale their house for.
In order to avoid this, Congress would have to extend the act before the end of the year. With the current elections and their winter break however, this may not happen until 2013.
For more information on this issue and Atlanta new home mortgages, contact Academy Mortgage.
Equal Housing Lender. (c)2012 Academy Mortgage License #3113. GA Lic. # 20505. This is not a commitment to lend. Academy Mortgage Atlanta: 5565 Glenridge Connector, Suite 400. Atlanta, GA 30342. Georgia Residential Mortgage Licensee.