Good news for those homeowners looking to do a short sale in the new year! This may also impact those facing foreclosure or trialing a loan modification with a principal reduction that could result in the “forgiveness of debt.”
Congress passed the “fiscal cliff package” late yesterday with language that extends the Mortgage Forgiveness Debt Relief through 2013. This is good for homeowners who are experiencing a hardship or for an other reason have to short sell their homes. This is because without these protections homeowners might otherwise be taxed on the amount “forgiven” by the bank as it may be treated as income. This gives home sellers, selling their primary homes, some relief in the new year.
Short sales will continue to drive many areas of Contra Costa and many have been waiting to sell their homes just wondering if these tax relief provisions would be extended. Many banks continue to push short sales as a more desirable option to foreclosure, so its believed will continue to see short sales rise in 2013.
For more information about the Mortgage Forgiveness Debt Relief Extended for 2013 just click on the link to read more including details about the package, links to the IRS and State tax relief information pages and more.
Keep in mind, this is just the IRS/Federal tax relief, and does not apply to the individual states. We have to wait still to see if California will follow suit as they did in 2010 to come in line with the Feds.
If you’re thinking of doing a short sale with your Contra Costa home in the New Year – call me for a free, confidential consultation.
Catherine Myers, Broker Associate
Prudential California Realty
Offices in Walnut Creek, Pleasant Hill and San Ramon
Concord, Clayton Resident since 1995!