Has the act been signed into law yet? Also does it apply to short sales and foreclosures as well as refi’s?
If I sold my house through a short sale would I be exempt from the 1099 tax cancellation of debt? What about if it went into foreclosure?
I just spoke with the complex tax dept. at the IRS and he said that although I do have a 1st and a 2nd mortgage both were used as purchase money. I never pulled out equity because the property never had equity from the time I bought it; and decreased 50%. And therefore fall under the 2007 debt forgiveness act since it is my primary residence and the property has never been borrowed against.
No, it has not been signed into law yet.
How it will apply depends on the final draft, and the President says he is going to veto it, so that will cause more delays in implementation.
on Aug 5th, 2009 at 11:29 am
As more and more people are contemplating the possibility of foreclosure or a short sale on their homes, many feel ”safe” that they may not owe taxes following the forgiveness of the debt by their lender(s). Be sure you do your homework, carefully. Hiring a short sale expert to help you negotiate the terms with your bank is important. Many terms are negotiable with the lender, and you MUST know what to ask for to protect yourself. Protect yourself from what you ask? From recourse, deficiency judgements or tax bills. Further, you must know what this Mortgage Debt Relief Act really means. It is NOT the cure-all and it is not even an option for all. It does not encompass all “mortgage debt,” so be careful. Take very careful note as to who this Act will help, and/or who it will not. If you have refinanced your mortgage, have a second, a third(if they were for cash or improvements) or if this is an investment property - you likely do not fall under the protection of this act at all.Hope that helps
References :
30 years lending experience
on Aug 5th, 2009 at 12:06 pm
No, it has not been signed into law yet.
How it will apply depends on the final draft, and the President says he is going to veto it, so that will cause more delays in implementation.
References :
Oregon Realtor
on Aug 5th, 2009 at 12:22 pm
Hi,
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References :