Many Phoenix Arizona distressed homeowners are waiting to find out whether or not the Mortgage Forgiveness Debt Relief Act of 2007 will be extended into and beyond 2013.
Arizona tax attorneys and CPAs still contend that for many Arizona homeowners, and under certain circumstances, the expiration of the Mortgage Forgiveness Debt Relief Act would not have caused those homeowners to have tax liability related to the cancelled debt associated with their short sale or foreclosure.
From what we have read published by the IRS and CPAs, situations such as an individual or family being insolvent, can result in the individual or family being able to cancel the debt that would have been owned under other circumstances. Here is a link to the IRS website page detailing the Mortgage Forgiveness Debt Relief Act and Debt Cancellation and points to consider when determining if there is tax liability to claim. Please make sure to always verify all accounting and tax related information with your CPA and/or your tax attorney.
As it turns out, the Mortgage Forgiveness Debt Relief Act has been extended to December 31, 2013 so for the next 12 months, the issue will remains has it has been since 2007. Remember, the extension of the Mortgage Forgiveness Debt Relief Act means homeowners may be excused from paying taxes on forgiven mortgage debt through the end of the 2013 year.
We are a team of Phoenix Arizona realtors who can help you with your Phoenix distressed property so contact us today if you believe you are a distressed Phoenix homeowner.