Save Money On Your Short Sale – ACT NOW!
If you are considering a short sale on your Jacksonville area house, you should know that time is running out on a very important tax credit, The Mortgage Forgiveness Debt Relief Act of 2007. This was implemented to save homeowners money by making them exempt from paying taxes on forgiven debt. That’s the good news… the bad news is that this benefit is scheduled to go away at the end of 2012.
If you are thinking about doing a short sale, you probably qualify for this tax exemption, but you need to act quickly to begin the process or you will lose the opportunity. A short sale usually takes approximately six months to transact from beginning of listing to closing of sale.
When you short sale your home you usually receive a 1099 from your lender showing the forgiven amount. The IRS views this amount as taxable income and, if it weren’t for the Mortgage Forgiveness Debt Relief Act, they would tax you on the total.
This could add up to thousands of dollars out of your pocket. Thanks to The Mortgage Forgiveness Debt Relief Act of 2007, you can save money by not paying taxes on the forgiven amount if your short sale is closed by the end of 2012. Currently we’ve heard of no talk about extending the act and most short sale experts seem to think that it won’t be.
Most homeowners do qualify for the act, but there are some situations that could make you ineligible. Here are a couple:
1. If the property that is sold is an investment property, second home or business property, it doesn’t qualify.
2. There is a cap of $2 million of forgiven debt that can be considered exempt from paying taxes. This isn’t something most people need concern themselves about.
For further restrictions on The Mortgage Forgiveness Debt Relief Act of 2007, visit the IRS website. Don’t delay and waste money – act now and take advantage of the Mortgage Forgiveness Debt Relief Act. Contact us to start the short sale process today! The sooner you get started, the sooner you can put this chapter behind you and move on with your life.