Tampa Palms, Westchase, Carrollwood and Tampa Bay Real Estate News From Jeanne Prigitano

I have had lots of folks ask me how Short Sales impact their taxes. The main question is usually about reporting the forgiven debt (the amount short) as taxable income (phantom tax). The Mortgage Forgiveness Debt Relief Tax of 2007, which has been extended through 2012, does allow you to exclude the forgiven debt as income if the home is your primary residence. However, there are certain criteria that must be met. I cannot give any financial advice. That is for your accountant. I can’t interpret the law. Then I am accused of practicing law without a license. What I can do is point you to the right place to begin to get your questions answered or to even know what questions to ask.

Here is a link to an IRS publication about the Mortgage Forgiveness Debt Relief Act of 2007.

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