The Real Estate business is closely connected with the government, as all people who are well versed in Real Estate transactions know.
The hottest topic out there right now for Real Estate and for many struggling homeowners, is the Mortgage Cancellation Relief Act. According to research by RealtyTrac, approximately 122,000 short sales closed across the nation between the months of January and October of 2014. The average debt forgiveness was about $88,500. The average seller had a balance on their mortgage 1.5 times higher than the actual market value of the house. We all know that these aren’t the easiest of times to survive in.
On December 16, 2014, the Senate passed H.R. 5771, the Tax Increase prevention Act of 2014. The provision stops the IRS from taxing the debt that lenders forgive in short sales, foreclosures, or loan modifications for the 2014 tax year. Congress is anticipated to discuss a further extension for 2015, but nothing is certain, 2015 could be counted as taxable income if a mortgage debt was forgiven.
The Republican tax party leadership in the house leans towards big tax reforms, wanting to end temporary tax code benefits that need extensions. This will make it hard for the act to be extended. Therefore, all the homeowners who didn’t make the cutoff date of December 31, 2014 or are experiencing their hardship now and wanting to do a short sale on their property are nervous as to what the outcome of this debate might be. And we in the Real Estate game know short sales are ANYTHING but short in regards to time. The process takes time and review from the lenders, making the cutoff date virtually unobtainable for some.
At Parker and Associates, we are well versed in short sale matters and are up to date on all laws pertaining to Real Estate transactions of any kind. Give our office a call, inquire via email, or through our website if you have any Real Estate or any other legal needs.