Goldstein & Levy, P.A., General Counsel
Legal Bulletin
January 18, 2013 | Shore Sale Debt Relief Extended Through 2013
Thankfully, Congress has acted to extend the Mortgage Debt Forgiveness Act through 2013, providing a sigh of relief to thousands of underwater homeowners who would have otherwise faced the prospect of paying income taxes on the mortgage debt forgiven when their mortgage lender approves a short sale, loan modification (with principal reduction) or completes a foreclosure sale. The Act expired on December 31, 2012 and there was a significant concern that the political focus on the “fiscal cliff” crisis would result in the failure of Congress to take steps to review and extend this benefit. A failure to extend could have had a significant impact on the decision of homeowners to enter into short sale transactions. Fortunately, the extension of this Act was included in the fiscal cliff vote.
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