|Posted by Ute Ferdig (Broker-Attorney) on March 24, 2012 at 8:25 PM|
Distressed home owners across the nation are wondering whether the Mortgage Forgiveness Debt Relief Act of 2007 will be extended past its current expiration scheduled for the end of the year. As a reminder, the legislation ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.
DSNews reported on February 15, 2012 that President Obama's fiscal year 2013 budget proposal includes an extension of the Mortgage Forgiveness Debt Relief Act of 2007 through the end of 2014.
Although the the passage of any budget proposal could be considered doubtful in the current political climate, it would appear that the recent extensions of the HAFA and HAMP programs would make no sense unless accompanied by an extension of the tax relief act. We can only hope that common sense will prevail and that the extension does not fall victim to an election year.