With the New Year comes some new laws. In this case, a new law that will help many Americans who are in difficult situations.
When the lender forgives a portion of the debt in a short sales, any of that debt that is forgiven is typically treated by the IRS as taxable income. What did I just say? If you were in a difficult situation and your bank forgave a portion of your loan, that portion which was forgiven would have shown up in your tax return as income! The last thing that a struggling family needs to worry about is this phantom income showing up and increasing your tax bill.
Congress has just passed HR 3648, which will prevent this debt relief from being considered taxable income.
Finally, some good news to help those who may be in a foreclosure situation.
Steve Mun, Silicon Valley Realtor
www.stevemun.com
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