Time is Running Out to Avoid
Tax Coming on
California Short Sales & California Foreclosures in 2014!
The Mortgage Debt Relief Act of 2007 is set to expire on December 31, 2013. There currently is no legislation being proposed to extend this tax exemption on mortgage debt forgiven through Short Sales & Foreclosures.
What this means is that beginning January 1, 2014 any California Homeowner who has Mortgage Debt Forgiven on their primary home through a California Short Sale, California Foreclosure, or California Loan Modification will be liable to pay income tax on the amount of the forgiven debt. With many mortgages hundreds of thousands of dollars underwater, this could mean very substantial tax bills for already suffering California homeowners.
What is the best way to avoid paying this tax? Complete a California Short Sale by the end of 2013.
Why not just let the bank foreclose? Because you are putting it in the hands of your bank as to when they not only complete the foreclosure process, but resell the property to recover costs in order to forgive debt.
To learn more about the Mortgage Debt Relief Act and California Mortgage Relief SB401 please visit our California Mortgage Debt Relief Act Page to see how these laws affect California Short Sales and California Foreclosures.
Information provided for educational purposes only. Please do not consider this tax or legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Please consult an attorney and/or CPA.