Some people selling their homes this year could be in for a big surprise by the way of a big tax bill if Congress does not restore the Mortgate Debt Relief Act. The act was originally enacted in 2007 to help people who were in a position of negative equity to sell their homes without paying income tax on the amount of money that was forgiven by the lender (known as “phantom income” ). The act expired at the end of 2013 and Congress currently does not appear to have a renewal of the act on it’s radar.
This act should be restored immediately, and without any partisan wrangling in Congress. The recovery of our economy is largely tied to our housing market, and while the market has been doing significantly better and showing signs of sustained growth and improvement, the situation is still tenuous!
Without the renewal of the act, anyone selling a home this year who owes more than the home is worth will be faced with an income tax liability for virtually every penny that the mortgage lender “forgives”. It isn’t much of a forgiveness when you sitll have to pay income tax on money that you don’t owe anymore!
We work with homeowners on a daily basis who by no fault of their own, find themselves in a situation where they are upside down on their mortgage. Without the help of the Mortgage Debt Relief Act they may be on a path to financial disaster.
We urge you to contact your local US Representative to voice your support for the immediate restoral of this important piece of legislation!
Metro Atlanta Area Members of Congress
|District||Congressman Name||Phone Number|
|4||Johnson, Henry C. “Hank” Jr.||202-225-1605|
|10||Broun, Paul C.||202-225-4101|
If you or someone you know are currently in a situation where you are behind on your mortgage, and the value of your home is less than what you owe, please contact us and we will evaluate your situation and provide you with the best guidance possible.