Harris Real Estate University Agent Short Sale Secrets coaching students..Read This Now…Short Sales are about to become easier for you and your clients.
Homeowners will no longer have to pay income tax on foreclosed properties or forgiven mortgages if President Bush signs a new law passed by Congress.
That means that most sellers wont have to worry about being taxed on the loss the bank had as a result of their short sale!
U.S. Sen. George Voinovich’s, R-Ohio, Mortgage Relief Act became a law Tuesday after being amended to win passage in the U.S. Senate and U.S. House of Representatives and winning White House approval before Christmas.
This new law is set to expire in 2009 and changes a current law that forces individuals to pay income tax when they have part of their mortgage forgiven or are forced in to foreclosure.
The way the law works now is that a homeowner can be on the hook to pay taxes on the forgiven debt. All that is about to change.
“Removing this tax penalty encourages homeowners and lenders to work together voluntarily so that payments are manageable and foreclosure can be avoided,” Voinovich said. “This tax actually penalizes those who are trying to work it out in a responsible manner.”
The Internal Revenue Service currently taxes any loan forgiveness as income forcing homeowners more in debt because they are being taxed on income that doesn’t exist, Voinovich said in a press release.
Ohio has the highest foreclosure rate in the nation at 3.7 percent and 32 counties had an increase in foreclosure filings above 24 percent including Montgomery County, according to the Mortgage Bankers Association.
Tags: foreclosed properties, foreclosure, george voinovich, harris real estate, hook, house of representatives, income tax, internal revenue service, lenders, loan forgiveness, montgomery county, mortgage bankers association, mortgage relief, ohio mortgage, president bush, president bush signs, relief act, responsible manner, tax penalty, u s senate
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