Archive for Mortgages

Underwater Homeowner Tax Relief Update

home & tax illustrationMany of us who are in real estate thought it wouldn’t happen, but in a blow to homeowners who are working their way through short sales, Congress did not extend The Mortgage Debt Relief Act of 2007 beyond 2016.

It expired on December 31, 2016 and underwater homeowners lost a huge tax benefit to help them regain their financial footing.

Generally, the amount of any cancelled debt is taxable as ordinary income, including mortgage debt cancellation.So if you’re working on a real estate short sale, consider the income tax consequences.

Don’t Be Caught Short

With the expiration of this Act, homeowners are left out in the cold and left with a potentially with a big tax bill for short sales in 2017 and thereafter.

There may be an exception available to you if you signed the short sale deal in 2016, even if the transaction closes in 2017. But new short sales entered into in 2017 are no longer covered by the expired legislation.

Be sure to check with your accountant so that you know the tax consequences of any mortgage debt cancellation. Debt cancellation is taxed at the ordinary income tax rates, not the capital gains tax rates.

© AskConny.com

Military Service Financial Protections

flag millitary servicemembers photoI was completely disgusted when reading the news articles in the last month about how mortgage companies have illegally foreclosed on active service members’ homes. The Service Members Civil Relief Act (SSCRA) was written to protect active duty personnel from that type of personal financial disaster. And it has been in place since World War II!
 
If we truly support our military service members, shouldn’t we at the very least start by affording them and their families the protections they are legally entitled to? And shouldn’t we make certain that they don’t have to fight for those rights to be enforced at the same time they are fighting to protect us? Saying you’re sorry, just doesn’t seem to cut it in this kind of situation.
 
Many small business owners are Reservists and their businesses often close or provide significantly less financial support for them and for their families when they are called to active duty. This law won’t help keep their businesses running while away from home, but it can help them stave off financial disaster while they are gone. So if you are currently serving, know your rights.