We have lost our home due to foreclosure or had a short sale and received a 1099C or 1099A. What is the Mortgage Forgiveness Debt Relief Act of 2007?
Generally, if you have been given a debt cancellation (1099-C or A), that amount would be included in your adjusted gross income, and you would be required to pay taxes on that amount. But under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude from tax up to $2 million of debt forgiven on your principal residence. If your mortgage debt is partly or entirely forgiven during 2007, 2008 or 2009 you may be able to claim special tax relief by filling out Form 982 and attaching it to your federal income tax return for that year. We would be happy to help you with that paperwork. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief. The debt must have been used to buy, build or substantially improve your principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old
Related Questions
- We have lost our home due to foreclosure or had a short sale and received a 1099C or 1099A. What is the Mortgage Forgiveness Debt Relief Act of 2007?
- I have been marketing my home fore sale under the HAFA Short Sale option and received an offer. Now what do I do?
- Can you recommend a WA-based CPA with experience in residential home short sale/foreclosure situations?
