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The income tax exemption on mortgage debt forgiven in a short sale or a workout for principal residences expired at the end of 2013. Without immediate action by Congress, distressed homeowners will have to pay tax on “phantom income” from forgiven debt. Many families have decided not to go through with short sales or seek workouts because of the uncertainty over the status of the waiver. This is not only unfair, but harms families, neighborhoods and communities.
On Wednesday night, the United States House of Representatives passed the bill containing the income tax exemption on forgiven mortgage debt and other expired tax provisions by a vote of 378-46, but the United States Senate has not yet voted on the measure. The National Association of REALTORS® (NAR) is urging all members to contact their senators in Congress and have them extend this tax relief now!
- Despite significant market recovery, more than 5 million are still “under water.”
- Nearly 1 million households are seriously delinquent on their mortgages or in foreclosure.
- Mortgage debt forgiveness tax relief is vital for these families.
Silicon Valley Association of REALTORS® says ... 