meizitang with alcohol sfu119

08.01.14 / Uncategorized / Author: / Comments Off
Tags:

Right now is the time to make the hard decision: Are you going to walk away from your underwater home? Because if you procrastinate and the clock run out you may owe large federal income taxes in 2013.

Why? You may ask,meizitang with alcohol, because through Dec. 31, 2012, the federal government forgives any tax liability associated with forgiveness of a mortgage loan often times associated with a short sale.

A word of caution to those home owners deciding to take the plunge… make sure the agent or attorney representing you get a letter from the bank/lender acknowledging that the short fall amount of the mortgage is forgiven. Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter: The banks must officially sign off in writing before December 31, 2012.

If a bank writes off debt in a short sale, it’s a “taxable event,” and the lender tells the Internal Revenue Service about the deal by submitting a “Form 1099-C,meizitang with alcohol, Cancellation of Debt” at the end of the year. Home sellers must acknowledge the amount when they fill out their federal taxes.

The December 31, 2012 deadline can always be extended by the federal government. In general many homeowners believe the government will do exactly that.

The government generally considers forgiven debt to be income. If a seller has signed legal loan papers to take out a $300,000 mortgage and the lender accepts $200,000 in a short sale, for example,meizitang with alcohol, the seller received the equivalent of $100,000 in free money by government estimates. As a result,meizitang with alcohol, the IRS taxes it. For tax year 2012, however, the government still forgives the debt; in 2013, it might not.

The tax amount can be significant. On a debt of $100,000, a short-sale seller in the 25 percent tax bracket could end up owing $25,000 in income taxes.

Therefore, since short sales can take months and some even fall through,meizitang with alcohol, homeowners considering doing a short sale may want to find a good realtor of attorney and start the ball rolling sooner rather than later.

As previously stated, the Federal Government is giving homeowners until Dec. 31, 2012, to go through a short sale or foreclosure without tax consequences – as long as the lender officially releases the debt.

Short Sale Sellers Need to Close in 2012 or Else

However, on January 1, 2013, the rules change: The amount a lender forgives, ether in a short sale or foreclosure, on a primary residence will be taxable on federal income taxes.

However, as evidenced by the First Time Home Buyer Credit expiration in 2010, you can’t always count on the government to extend the safety net and give needy home owners a bailout.