Tax Relief for Distressed Homeowners Seeks to be Extended Through 2016
Short Sale Solutions
The Mortgage Forgiveness Tax Relief Act of 2015 introduced by Tom Reed (R-New York) and a similar bill introduced by Debbie Stabenow (D-Michigan) and Dean Heller (R-Nevada) will help out distressed homeowners who sell their home via a short sale. Without this, they will be required to pay additional taxes when they receive mortgage principal forgiveness on their homes or do a short sale.
Stabenow stated that, “without this bipartisan legislation, families willing to work with their lenders will have to pay hundreds or thousands of dollars in additional income tax when they sell or refinance their home. That’s just wrong.”
This legislation that has been introduced will extend tax relief to underwater homeowners through 2016.
Heller, being a member of the Senate Finance committee, wants to find the best way to get this passed, “Unless Congress acts, those who are underwater in their homes and have received financial relief for their mortgage could be forced to pay a tax on income they never received. This makes no sense, and the legislation Senator Stabenow and I introduced ensures it won’t happen.”