{"id":979,"date":"2012-04-22T15:34:52","date_gmt":"2012-04-22T19:34:52","guid":{"rendered":"https:\/\/orlandorealtyconsultants.com\/?p=979"},"modified":"2022-01-26T21:39:20","modified_gmt":"2022-01-26T21:39:20","slug":"the-window-is-closing-on-orlando-short-sales","status":"publish","type":"post","link":"https:\/\/orlandorealtyconsultants.com\/es\/the-window-is-closing-on-orlando-short-sales\/","title":{"rendered":"The Window is Closing on Orlando Short Sales!"},"content":{"rendered":"

<\/h2>\n

The Mortgage Debt Relief Act of 2007 is set to expire<\/h2>\n

The tax-relief provisions enacted by Congress during the housing crisis to help financially strapped homeowners is about to come to an end. This is the 2007 law that allows taxpayers to exclude from income the amount of debt that is forgiven or canceled by their lender. The good news is that if your considering an Orlando Short Sale,<\/a>\u00a0 there is still time to take advantage of this very important law.<\/p>\n

Although the law doesn’t officially expire until Dec 31, 2012, anyone considering a short sale should get started now. We’ve had short sale files in our office that have taken up to two years to complete. It’s true that banks are moving Florida short sales along much faster now but overall they still move pretty slow.<\/p>\n

I’m not saying that people who are struggling to hold onto their Orlando homes<\/a> should throw in the towel solely because of the pending tax bite, but it is certainly something to consider.<\/p>\n

According to the law, borrowed money doesn\u2019t need not be reported as income because you have an obligation to repay. But if your lender subsequently cancels what you owe, the IRS requires that you report that debt as income because the duty to repay it no longer exists. So, if you owe $350,000 and your lender forgives $50,000 of that debt in a $300,000 refinancing, that $50,000 is considered income. If your combined federal and state marginal tax rate is 36 percent, you would owe $18,000 in taxes. Ouch!!!<\/p>\n

However, under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers are allowed to exclude from income the discharge of debt on their principal residence when they do a short sale\u2014 at least until 2013.<\/p>\n

This means that when your lender agrees to a short sale, there is no tax on the difference between the selling price and the amount you owe. When your lender forecloses, there is no tax on the canceled debt. Even when you refinance at a lower loan balance, there is no tax on the difference between what you owed on the old loan and what you now owe on the new one.<\/p>\n

Unless Congress extends the law, [and there is no indication lawmakers are even thinking about that] all residential mortgage debt relief that takes place on or after Jan. 1, 2013, will once again be considered taxable income.<\/p>\n

If you are on the fence about doing a short sale on your house, consult with a short sale expert<\/a><\/strong> and get informed about your options.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Mortgage Debt Relief Act of 2007 is set to expire The tax-relief provisions enacted by Congress during the housing crisis to help financially strapped homeowners is about to come to an end. This is the 2007 law that allows taxpayers to exclude from income the amount of debt that is forgiven or canceled by […]<\/p>\n","protected":false},"author":4,"featured_media":21632,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[7,21,5,17,1],"tags":[10,11,60,13,15,16,61,55,19],"class_list":["post-979","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-florida-real-estate","category-orlando-real-estate","category-orlando-short-sales-2","category-uncategorized","tag-orlando-real-estate-2","tag-orlando-real-estate-expert","tag-orlando-realtorr","tag-orlando-realty","tag-orlando-short-sale-news","tag-orlando-short-sale-realtor","tag-short-sale-laws","tag-short-sales","tag-stop-foreclosure"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t