SHORT SALE Taxes
Take Action To Save On Short Sale Taxes in 2013
If you are an underwater homeowner — meaning you owe more on your home than it is currently worth — take note. The Mortgage Forgiveness Debt Relief Act of 2007 was extended until the end of 2013.
The Act allows borrowers to exclude, from income, certain canceled debt on their principal residence, including debt reduced through mortgage restructuring or forgiven through a foreclosure or short sale.
If you are thinking of listing your home as a short sale — selling it for less than the mortgage balance — take action to complete the short sale before December 31, 2013. If you wait and the short sale closes in 2014, you may find yourself with forgiven debt being calculated as income, resulting in a much higher tax bill than you had anticipated.
Short sale processes have changed to expedite the transaction for both seller and buyer. In addition, well-maintained and priced-right homes are selling faster in today’s market. Feel free to consult us at any time in confidence. We would love to help answer your real estate questions and find out if now is the right time for you to sell your home.