From Nations Bulding News:
Ongoing efforts in the housing finance industry to keep home owners from losing their homes, limit the amount of inventory returning to the market and help check further housing price declines are being hampered by federal tax law that legislators on Capitol Hill are attempting to change, according to NAHB economist Robert Dietz.
“The Internal Revenue Service treats all debt amounts that are reduced, forgiven or eliminated as part of a mortgage restructuring or foreclosure as taxable income,” Dietz writes in a special study for NAHB Housing Economics.
“For home owners struggling to make their regular mortgage payments, this phantom income taxation creates a disincentive against restructuring an existing mortgage to ensure continued payment and avoid foreclosure,” he says. “To prevent this tax from applying to home owners and lenders seeking to restructure existing mortgages, Congress must modify the nation’s tax code.”
H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007, which would eliminate the tax consequences associated with debt forgiveness, has been approved by the House of Representatives.
What are the restrictions on the H.R. 3648: Mortgage Forgiveness Debt Relief Act of 2007 bill? If they have been in the property for less than two years or have refinanced in that time does it still apply to them?
Posted by: sandra Argumedo | January 03, 2008 at 08:20 AM
The post, "H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007" is pretty informative... Thank you for sharing...
Posted by: Bobby Korey | September 13, 2008 at 02:26 AM
This article was posted in 2007. It's amazing what has happened since then.
Posted by: arizona bankruptcy attorney | May 16, 2009 at 05:39 AM
Considering what is happening now in 2009 this article was amazingly prophetic.
Posted by: arizona bankruptcy court | July 12, 2009 at 06:34 AM