Help Extend Mortgage Debt Forgiveness
The National Association of REALTORS® is calling on its members to help urge Congress to renew the Mortgage Debt Forgiveness Act, an income tax exemption on mortgage debt forgiven in a short sale or a workout for principal residences.
The Mortgage Debt Forgiveness Act expired at the end of 2013, which means that distressed home owners are responsible for paying taxes on "phantom income" from the forgiven debt once the properties are sold. The tax on a 2014 short sale or workout would be due April 15 of next year if Congress does not extend the measure. (Read more about the issue.)
"Unless Congress acts, hundreds of thousands of American families who did the right thing will have to pay tax on 'phantom income' — money they never see," reads an ad issued by NAR, which will run in select Capitol Hill publications this week.
The Mortgage Debt Forgiveness Act expired at the end of 2013, which means that distressed home owners are responsible for paying taxes on "phantom income" from the forgiven debt once the properties are sold. The tax on a 2014 short sale or workout would be due April 15 of next year if Congress does not extend the measure. (Read more about the issue.)
"Unless Congress acts, hundreds of thousands of American families who did the right thing will have to pay tax on 'phantom income' — money they never see," reads an ad issued by NAR, which will run in select Capitol Hill publications this week.
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