San Diego, CA – EHS says “Be Concerned.” Here’s how the 2007 Act works. If your lender forgives any of your loans, it is reported to the IRS as ordinary income. That income could add over $100,000 to your taxable income. The 2007 bill forgives that tax.
Congress created a bi-partisan 12-member committee to reduce the $1.5 trillion dollar tax deficit. Everything is on the table including the tax deduction for mortgage interest and property taxes. This tax credit, which allows homeowners to exclude up to $2 million dollars in mortgage debt forgiveness, is an easy fix. Remember, congress didn’t extend the first time buyer credit.
2012 is a presidential election year. There is no telling who will be in power or what the political ear will be willing to hear.
Even the current mortgage interest tax deduction is under scrutiny. The committee estimates that by limiting mortgage interest and other itemized deductions for household incomes above $250,000 or individuals over $200,000, they can shave off $250 billion from the deficit. Why not allow a temporary act already scheduled to expire for everyone in 2012 disappear? This will affect people making a lot less than $250,000.
Homeowners need to think hard. Banks can keep homeowners on the hook paying if they face serious taxes. They can foreclose if homeowners can’t pay. Advice: Don’t wait!
Note: I am a real estate broker, not a tax professional. All information is from other sources such as the IRS Mortgage Relief Act. Please contact your tax professional to see how these factors will affect your particular case.
For more answers, sign up for a FREE Guide for Distressed Homeowners.
Mary Ellen Wilson, broker (Lic. #01487433), Expert Home Solutions Inc. dba Expert Home Auctions International, 877-267-2514x7, 877-276-8563 FAX, firstname.lastname@example.org, has been licensed since 2005. Her internet experiences from 1995, prompted her to start EHA online in May, 2009. She has run over 40 auctions.