Mortgage Forgiveness Debt Relief Expires Dec. 31

By  //  December 26, 2012

Loading the player ...
Share on Facebook Share on Twitter Share on LinkedIn Share on Delicious Digg This Stumble This

REAL ESTATE

BREVARD COUNTY, FLORIDA – The Mortgage Forgiveness Debt Relief Act of 2007 is scheduled to end Dec. 31, 2012. If no extension is granted, homeowners will have to pay taxes on any unpaid balance forgiven by a lender after a short sale, modification or foreclosure.

That means if you owe $200,000 on your home and sell if for $125,000, you will be taxed on $75,000.

Tony Hurt

Tony Hurt, a Financial Planner and Investment Advisor with Miller & Hurt Financial Group in Rockledge, says a homeowner could be pushed into a higher tax bracket depending on how much debt is forgiven.

“If the home owner is struggling to make their mortgage payments, it would seem unlikely that they could afford a higher tax liability to the IRS,” said Hurt.

Homeowners whose banks have forgiven unpaid mortgage debt after a short sale, principal reduction or foreclosure have not had to count that money as income on their tax returns since 2007.

A short sale is where the lender agrees to sell a property for less than what the homeowner owes on the mortgage.

Realtors, accountants and financial planners are urging homeowners considering a short sale to put their properties on the market now in hopes of a successful closing by the end of the year.

A short sale is where the lender agrees to sell a property for less than what the homeowner owes on the mortgage.

665 Short Sales In Brevard

Durning the first quarter of this year, 665 short sales have closed compared to 535 same time last year according to the local MLS.

Statewide, 15,949 short sales were conducted in the first quarter of the year, an 18 percent increase from the same time in 2011 according to RealtyTrac.

In March, a bill was introduced in the U.S. House of Representatives “Homeowners Tax Fairness Act” to extend the Mortgage Debt Relief Act through the end of 2015. This requires congressional approval.

ABOUT THE AUTHOR

Freeman

Bobby Freeman, a life-time resident of Brevard County, has been a top Realtor in the area for two decades. In his first year as an agent, Freeman received a Rising Star award from his Brokers. Since then he has achieved numerous sales awards and has recently been presented with the prestigious RE/MAX Hall of Fame Award.

Freeman, Jennifer McCoy and Nikki McCoy Freeman are family partners for RE/MAX Elite’s McCoy-Freeman Group. Together they have more than 30 years of extensive experience in all aspects of the real estate industry and have sold over $150 million. Among McCoy-Freeman Group’s achievement are RE/MAX Hall of Fame, RE/MAX 100% Club, Certified Distressed Property Experts (CDPE), Accredited Buyer’s Representative (ABR) and voted Best Realtor in Brevard County. The group has been featured in many news publications including CNN Money Magazine, CNNMoney.com, WFTV 9 ABC News, Coastal Condo Living, & Hot Retirement Towns Magazine and SpaceCoastDaily.com.

For more information log on to BrevardRealtyConnection.com


Click here to contribute your news or announcements Free