January 2, 2013
Iâ€™m please to start the New Year with some good news.
Last night, Congress reached a settlement in the â€œfiscal cliffâ€ negotiations.Â As a result, the Mortgage Forgiveness Debt Relief Act has been extended for another year.Â The measure will continue to exempt from taxation mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale, loan modification (including any principal reduction) or foreclosure.Â
Meaning: the difference between what they owed on the property and what was â€œforgivenâ€ will not be taxed as a â€œprofitâ€.
As mentioned by California Association of Realtors, â€œThe settlement also will allow capital gains rates to rise from 15 percent to 20 percent for high-income earners. Â Â However, capital gains rates on the sale of principal residences will remain unchanged and continues to exclude the first $250,000 for single taxpayers and $500,000 for married couples.â€
Happy New Year to you all!Â Letâ€™s make this the best one yet!