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Forums » Short Sales » Mortgage Debt Relief Act

Mortgage Debt Relief Act Subscribe to Mortgage Debt Relief Act

6 posts by 4 users

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Alex Locklear

Real Estate Investor · Raleigh, North Carolina


Forum_avatar_avatar-alexlock85

Icon_minipost Sep 26 '09, 06:24 AM

I want to understand this completely.

Is this stating that if a home owner has received a tax deficiency for a house that was short sold, but lived in the home for 2 years, they don't have to pay this?

Thanks

Edited: 06/26/2010 at 09:50AM


H Mann

Real Estate Investor · Bay Area, California


Forum_avatar_avatar-hmann1

Icon_minipost Sep 26 '09, 07:55 AM

I can't comment on the 2 years part, but yes...properties that were short-saled and owner-occupied are supposed to be forgiven as far as taxes go.

But I think there's more to it...if you had an equity line that wasn't a purchase line, then there might be some different rules behind it.

Edited: 06/26/2010 at 09:50AM


Jon Holdman

Real Estate Investor · Denver, Colorado


Forum_avatar_avatar-wheatie
ModeratorPro

Icon_minipost Sep 26 '09, 08:27 AM

As I understand, it does not apply if cash was taken out of the house. Purchase mortgages do qualify. I think HELOCs or refis might work if the money was used for home improvements, or a refi was done for the current balance. I'm sure it doesn't work if cash was taken out for another purpose.

Edited: 06/26/2010 at 09:50AM

Small_flying-phoenixJon Holdman, Flying Phoenix LLC


Alex Locklear

Real Estate Investor · Raleigh, North Carolina


Forum_avatar_avatar-alexlock85

Icon_minipost Sep 26 '09, 08:30 AM

Ok great, so purchase money only.

Does a homeowner have to live in the place for 2 years to get this forgiven?

Edited: 06/26/2010 at 09:50AM


Christopher W.

Residential Real Estate Agent · Orange County, California


Forum_avatar_avatar-seawolf177

Icon_minipost Sep 26 '09, 09:02 AM

I may be thinking of something else but doesn't the homeowner also have to be insolvent at the time of the short sale?

Edited: 06/26/2010 at 09:50AM


Jon Holdman

Real Estate Investor · Denver, Colorado


Forum_avatar_avatar-wheatie
ModeratorPro

Icon_minipost Sep 27 '09, 05:41 AM

Here's an IRS document regarding this act:

http://www.irs.gov/individuals/article/0,,id=179414,00.html

Edited: 06/26/2010 at 09:51AM by Jon Holdman

Small_flying-phoenixJon Holdman, Flying Phoenix LLC


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