Mortgage Debt Forgiveness Extended Retroactively For 2014

Late in December while we were preparing for the holiday season, Congress extended the Mortgage Debt Forgiveness Act retroactively for 2014. This is great news for those who went through a short sale last year as this extension will grant tax relief for an average of $75,000 in mortgage forgiveness. The Mortgage Debt Relief Act was first enacted in 2007 and generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. This provision applies to debt up to $2 million, or $1 million if married filing separately. There is no word on whether this act will be extended through 2015 but check back with us for further updates. If you would like more information about the Mortgage Debt Forgiveness Act, call Kevin Kling at (386) 527-8577 and let us know how we can help!