Mortgage Debt Forgiveness Act & IRS Debt Cancellation
One of the unfortunate results of the recent home crisis is the reported taxpayer gains that can occur as the result of
the foreclosure or short sale of a home. When the bank or lending institution forecloses on a home or approves of a short sale, the taxpayer is issued a 1099C for the amount remaining on the mortgage. The IRS views that amount as a taxable net gain.
However, because our tax professionals know and understand the laws and regulations for recourse and nonrecourse loan structures, we have helped many clients eliminate the tax liability that results from the short sale or foreclosure of a primary residence or from a bankruptcy filing. Specifically, the Mortgage Debt Forgiveness Act provides certain taxpayers an exemption for income related to mortgage restructuring and mortgage debt forgiveness.
Click the “Learn More Link” or Call (877) 889-6527 to have one of our tax professionals provide a free consultation regarding your short sale or home foreclosure.