On January 1, 2013, Congress passed an extension of the Mortgage Forgiveness Debt Relief Act. This great news for struggling homeowners in the Grand Strand.
The Mortgage Forgiveness Debt Relief Act was originally passed in 2007 to aid the millions of homeowners who suddenly found themselves in danger of losing their homes to foreclosure following the housing market crash.
Under the Mortgage Forgiveness Debt Relief Act, any debt forgiven in a short sale, foreclosure, or loan modification, is exempt from federal taxes on primary residences.
For homeowners facing foreclosure, this exemption may save them from paying thousands, or even tens of thousands, in taxes on top of losing their homes. For another year, homeowners can take advantage of this exemption if they must do a foreclosure, a short sale or a loan modification.
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