The President signed the Mortgage Forgiveness Debt Relief Act of 2007 today and of course I think that’s wonderful. I must admit though, I’m a little more than puzzled after reading the President’s press release and comments.
He continues to talk about the tax bill that results in a mortgage refinance. He said ‘refinance’ or ‘refinancing’ no less than eight times with regards to this legislation that was signed into law today.
Maybe that’s because the President wanted the Broken Credit Blog to break the real story here, so ok I’m game. Ready? Set?
NO MORE TAXES on the SHORT SALE!!!
There are some restrictions. The property must be considered your principal residence (i.e. must have been used as your principal residence for periods aggregating 2 years or more during the past 5 years) and it is restricted to acquisition indebtedness (i.e. money used to buy or improve the property). Also, it’s capped at $2M, but hey the bankruptcy and insolvency exclusions still apply if you need to get into bonus rounds.
All in all, this is definitely favorable news for anyone considering a short sale.
This author is not an accountant and this information should not be considered tax advice. Please consult an accountant for tax advice.