Mortgage Tax Relief Bill
In the past, any homeowner who had debt foregiven through a Foreclosure, Deed In Lieu Of Foreclosure, or a Short Sale was subject to tax on the amount that the borrower had been forgiven. If the property was sold at foreclosure or was sold for less than what was borrowed, that difference was considered income and subject to the tax. The lender who forgives the debt was required to provide a Form 1099 to the IRS stating the amount.
This bill will ensure that any debt forgiven on a mortgage secured for a principal residence will not be taxed in the future.
President Bush signed the Morgage Tax Relief Bill into law yesterday, Thursday Dec. 20, 2007 and will be a a huge relief to millions of families who face this financial burden.
Other Real Estate Related Bills passed by the US House, already passed by the Senate:
Mortgage Insurance Tax Deductibility. This bill makes mortgage insurance premiums tax deductible for all mortgages originated for the next three years. Mortgage insurer Genworth Financial estimates that this tax break is worth $350 to the average taxpayer who has purchased a home with less than 20 percent down.