Way to go - Ways and Means Committee!
Lets give props to the Ways and Means Committee for unanimously approved Bill (H.R. 3648), the Mortgage Forgiveness Debt Relief Act of 2007 that relieves foreclosed homeowners from income tax on debt forgiven by their lender. This problem gained major focus in response to some of the tax issues that have arisen as a result of problems in the subprime mortgage market. As it is now, the homeowners who lose their home and have forgiven debt by a lender may be subject to this as taxable income. Under current law, debt forgiven following mortgage foreclosure or renegotiation is considered income for tax purposes, resulting in tax liability for individuals and families.
Some additional points:
- Now the bill is advanced to the next step.... if it does not die out ....this debt would be excluded from taxation on or after January 1, 2007.
- It will provide relief to those families by permanently excluding debt forgiven under the foreclosure circumstance.... from tax liability.
- The bill would also help would-be homeowners secure their investments through a long-term extension of the tax deduction for private mortgage insurance, and would ease restrictions for qualifying as housing cooperative corporations.
- Finally, the bipartisan bill would tighten requirements taxpayers must meet to exclude gain from the sale of certain homes that have been used as a vacation home or rental property.
- H.R. 3648 has received strong support from the housing and mortgage industry.
- As with any tax issue, the sellers need to discuss with a qualified CPA.
Rosemary, it is great news isn't it? I'm counting on it going all the way. It will benefit a great deal of people who have experienced a genuine hardship and I'm for that!