Homeowners Debt Relief Act Extends Tax Relief

By  //  January 24, 2014

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CONTACT YOUR CONGRESSMAN TO PUSH FOR SUPPORT

I applaud Congressman Bill Foster (D-Illinois) for recently introducing the Homeowners Debt Relief Extension Act (H.R. 3856). 

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. This provision applies to debt forgiven in calendar years 2007 through 2013. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
This provision applies to debt forgiven in calendar years 2007 through 2013. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

This bill would extend the mortgage debt tax exemption for another two years. Foster’s bill would ensure that any qualifying cancellation or reduction of mortgage debt would not be considered taxable income.

This would extend tax relief through January 1, 2016. The proposal calls for the costs of the extension to be offset by repealing a tax break in the Internal Revenue Code’s Section 199 for oil and gas companies.

Foster says the Section 199 deductions are no longer necessary since oil and gas companies are making billions in profits each year.

“I’m sure all Americans would agree removing a tax break from Oil & Gas companies that are raking in billions in profits every quarter to help struggling Americans down on their luck is a good idea,” said RE/MAX Elite Broker/Owner Justin Brown.

CONTACT YOUR CONGRESSMAN TO PUSH FOR SUPPORT

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Justin Brown

Justin Brown

This provision applies to debt forgiven in calendar years 2007 through 2013. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately).

The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

This tax relief expired on December 31, 2013, however, and so far, no extension has been passed by lawmakers, though homeowner advocates are lobbying heavily to reinstate the mortgage debt tax exemption.

Please help by contacting your local Congressman to push for support of H.R. 3856.

ABOUT THE AUTHOR

Bobby 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 $200 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

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