Mortgage Debt Relief Act Extended Through 2016
The $1.1 trillion omnibus appropriations bill includes a two-year extension to the Mortgage Debt Relief Act.
The act waives the federal tax on the forgiven home-loan amounts in short sales and some loan modifications.
The extension covers the 2015 year retroactively, and all of 2016 until 2017.
The following is an excerpt from a 12/18/15 news release from Realtor.org the website of the National Association of Realtors. National Association of Realtors Applauds Passage of Tax Extenders Package.
Tom Salomone, National Association of Realtors® president and broker-owner of Real Estate II Inc. in Coral Springs, Florida, praised Congressional leaders today after the House and Senate passed a tax extenders package that includes many provisions supported by NAR.
“These tax extenders offer critical support for consumers, homeowners, commercial property investors and small businesses alike,” said Salomone. “A strong economy requires certainty, and this proposal gives a healthy dose of it to millions of American taxpayers.”
Salomone highlighted the decision to extend tax relief for mortgage debt forgiveness as a win for Realtors®. This provision protects underwater homeowners from incurring a large tax bill on phantom income in connection with a workout or a short-sale. Since 2007, this tax relief has strengthened individual communities and the broader economy as more distressed homeowners were offered the flexibility to responsibly address an underwater mortgage. The tax extenders deal offers an additional two years of protection covering tax years 2015 and 2016
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