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Posted January 7 2013
The great news for homeowners in Southern Nevada who are still trying to wade the flood waters of the housing market is that in the last-hour "a vote in Congress to avoid the "fiscal cliff" included a provision that extends the Mortgage Forgiveness Debt Relief Act through 2013, which is important to sustaining the nascent housing recovery in Las Vegas, local real estate professionals said Thursday." according to an article by Hubble Smith of the Las Vegas Review Journal.
The article went on to say, "The debt relief act, which was scheduled to expire at the end of 2012, waives forgiveness of mortgage debt from being counted as taxable income by the Internal Revenue Service.
That applies mainly to short sales of homes, or lender-approved sales for less than the principal mortgage balance. A homeowner who owes $150,000 on the mortgage and short sells for $100,000 would have been taxed on the $50,000 difference as income, placing them in a higher tax bracket.
Struggling homeowners who are considering a short sale or loan modification will be eligible for tax relief through Dec. 31 under the act passed in 2007 and originally scheduled to expire in 2009.
Short sales account for about 45 percent of all home sales in Las Vegas, the latest statistics from the Greater Las Vegas Association of Realtors show.
For some sellers, taxes incurred by the debt forgiveness could add up to tens of thousands of dollars, he said.
Other real estate-related provisions in the bill:
■ Deduction for mortgage insurance premiums for filers making less than $110,000 is extended through 2013 and made retroactive to cover 2012. The tax break covers private mortgage insurance as well as mortgage insurance provided by the Federal Housing Administration, the Veterans Affairs and the Rural Housing Service.
■ Fifteen-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012.
■ The 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012."
Basically, this means that you can still short sale your home, receive not income hit from the IRS and if you work with a diligent, knowledgeable real estate team like The Gonzales Team at Keller Williams Realty that will give you and your home the full treatment you deserve, you can receive zero deficiency, possible some cash to move and the weight of the home off your shoulders. Give The Gonzales Team a call today to find out how we can help you.
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