Short Sales Get A Reprieve on Debt Foregiveness Taxation

Homeowners who are considering a short sale or are in foreclosure will still be able to reap the benefits of the Mortgage Debt Forgiveness Act. This was to expire on December 31, 2012. As part of the “fiscal cliff” resolution, Congress has extended this until December 31, 2013. What this means to troubled homeowners they will not be liable for any taxes on the short fall on the sale of their homes.

There are still many homeowners who have been hanging on trying to make ends meet, and may be faced with either a foreclosure or having to sell their home on a short sale this year. With the extension of the Mortgage Debt Forgiveness they can breath a sigh of relief as they won’t have to pay taxes on the difference between what the home sells for and what they owe.

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