Short Sale Tax Forgiveness Extension
Will Congress extend the Mortgage Debt Relief Act of 2007? As you probably noticed lately Washington is ALL messed up. There isn’t much that gets done in Washington that doesn’t have political overtones. Unfortunately for most homeowners who will not get their short sale or foreclosure concluded by the end of this year the tax law is expiring. There is still a slim chance that it will get extended but if it doesn’t get extended there are other viable legal options.
And yes foreclosure is included in this situation. The banks determine when a foreclosure takes place which leaves homeowners at the banks discretion (not a good place to be these days). You cannot force the bank to do what they have complete discretion to do. The banks move at their own incredibly slow pace.
But the point that sometimes gets ignored is that the debt forgiveness tax applies to a borrowers first mortgage when a foreclosure occurs. And worse if there is a second mortgage the bank can sue the borrower after the foreclosure for the full amount of the second mortgage. This is very painful for most people who have been foreclosed on to face – you owe the IRS money and your second mortgage lender can sue you!
Needless to say YOU NEED A LEGAL consultation if any of the above makes you concerned. Do not talk to a real estate agent – you need professional legal and tax advice! There are options to avoid the IRS man knocking on your door. A full legal consultation is what you need now. Don’t wait!
If you have any questions or concerns about your own personal situation I would be happy to give you a FREE one on one legal consultation. You can call me at 916.442.6400 or send me an email at firstname.lastname@example.org or just visit my website www.upsidedownca.com.
California Attorney and
licensed Real Estate Broker