The Mortgage Debt Forgiveness Act Extended for 2013
for Augusta GA Short Sales
What is the Mortgage Debt Foregiveness Act?
If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable.
The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.
How does this relate to my Augusta GA Short Sale?
If you short sale your home in the Augusta area, you are negotiating with your lender to take a lower price for the home than the amount that you actually owe them. You hire your Augusta short sale Realtor to assist you in negotiating a forgiveness of the balance of the debt that is not paid back to the lender out of the proceeds of the home. The Mortgage Debt Relief Act allows you the possibilty of avoiding paying taxes on the money that you did not have to pay back to the lender.
This is great news for the Augusta Real Estate Market.
If you need to sell your home, but it is worth less than what you owe the lender, you do have options. Andy Ackerman is very experienced in the short sale process and can help you complete a successful transaction.
Please contact Andy Ackerman at 706-254-2322