In a real "Cliff Hanger", the "American Taxpayer Relief Act of 2012" was passed by the Senate at 0 Dark Thirty on New Years Eve and by the House at 10:30 EST last night . It is expected to be signed into law by President Obama within the next few days.
This is good news for America's underwater homeowners who may need to short sell their home as it extends the 2007 Mortgage Forgiveness Debt Relief Act through the end of 2013. The Mortgage Forgiveness Debt Relief Act, which was due to expire at midnight on December 31, 2012, generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Prior to this act, if you owed a debt to someone and they cancelled or forgave that debt, the forgiven amount "could" be considered "income". Here is what the IRS has to say about the "Mortgage Forgiveness Debt Relief Act". As always, the devil is in the details so homeowners are still encouraged to consult with their tax professional regarding their specific circumstances.
Also important to home buyers, sellers and owners: the deductions for mortgage insurance premiums and state and local real estate taxes were extended as was the capital gains exclusion on the sale of a principal residence.
For more up to the minute information on short sales in Southern New Hampshire, contact me at 603-490-5344.