GREAT NEWS for Short Sales!!
If you sold a primary residence as a short sale in 2014, Congress has just given you a fantastic early Christmas gift!
The mortgage debt relief act extension has been passed by both the House AND the Senate, and the President is expected to sign it into law any day!
What Does This Mean For Short Sales That Have Already Happened?
When you do a short sale, the lender typically forgives the outstanding loan debt, and they write it off as a 1099 to you at the end of the year. With the Mortgage Debt Relief Act Extension, that means that the IRS will NOT be taxing you on that 1099 “income”. This law is retroactive for all of 2014!
What About People Who Short Sale in 2015?
Unfortunately this extension will only apply to short sales that successfully close in 2014. Another extension is possible for short sellers in 2015, and in fact there is already a bill in congress to make it a permanent amendment to the tax code, but don’t expect anything to happen until the newly elected members of congress go to work in January of next year.
Got questions about how this affects you? Let us know and we will get you the help you need!
(Photo courtesy of Pete Jordan Via Flickr CC)
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