1. Mortgage Forgiveness Debt Relief Act Extension

1. Mortgage Forgiveness Debt Relief Act Extension One of the few silver linings of last year’s fiscal cliff ordeal, the Mortgage Forgiveness Debt Relief Act of 2007 was extended for another year as part of negotiations. This should come as a weight lifted from the shoulders of homeowners who are attempting to have mortgage debt forgiven this year. That’s because usually, debt that is written off by a lender or creditor is usually considered as income, and therefore, subject to income tax. In the case of mortgage debt, those who were forgiven tens or hundreds of thousands of dollars would still be responsible for a huge tax bill. However, in order to provide additional relief to struggling homeowners and protect them from this financial burden, the Mortgage Forgiveness Debt Relief Act was put in place — temporarily. Luckily, though set to expire at the end of 2012, it has been extended through 2013. Mortgage Forgiveness Debt Relief Act Eligibility The IRS explains that the act covers the following debt: Up to $2 million in forgiven debt, or $1 million if married filing separately. The discharge is due to reasons directly related to a decline in the home’s value or the taxpayer’s financial condition Cited from: http://www.gobankingrates.com/mortgage-rates/5-best-2013-mortgage-relief-programs-loan-modifications/#ixzz2KsWiitrJ