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Mortgage Forgiveness Debt Relief Act Expires

In previous posts, we’ve discussed the tax benefits derived from the Mortgage Forgiveness Debt Relief Act, first enacted in 2007 and extended in 2009.  This act waived the taxes incurred by a foreclosure or short sale.  The difference between what a house sells for and what is owed on the mortgage is considered forgiven debt and a taxable event.  Currently, this tax is waived on the foreclosure or short sale of a primary residence on a purchase money loan.  The act expires at the end of this year.  While it may be extended, right now we have no idea what will happen.  If you are considering a short sale, now may be the time to get more information and see if this is the right decision for you.  Contact us at LasVegasHomeSpecialist for additional information.

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