Lemonade diet master clease
mortgage workout relief
AR Members*
If
you’ve had some debt forgiven as a result of either a foreclosure or a
mortgage restructure, you may qualify for debt relief under
this newly revised IRS law. The full article is available at www.irs.gov.newsroom
WASHINGTON — Homeowners whose mortgage debt was
partly or entirely forgiven during 2007 may be able to claim special
tax relief by filling out newly-revised Form 982 and attaching it to
their 2007 federal income tax return, according to the Internal Revenue
Service.
Normally, debt forgiveness results in taxable income. But
under the Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec.
20, taxpayers may exclude debt forgiven on their principal residence if
the balance of their loan was less than $2 million. The limit is $1
million for a married person filing a separate return. Details are on
Form 982 and its instructions, available now on this Web site.
“The new law contains important provisions for
struggling homeowners,” said Acting IRS Commissioner Linda
Stiff. “We urge people with mortgage problems to take full
advantage of the valuable tax relief available.”
The late-December enactment means that reporting procedures
for this law change were not incorporated into tax-preparation software
or IRS forms. For that reason, people using tax software should check
with their provider for updates that include the revised Form 982.
Similarly, the IRS is now updating its systems and expects to begin
accepting electronically-filed returns that include Form 982 by March
3. The paper Form 982 is now being accepted, but the IRS reminds
affected taxpayers to consider filing electronically, which greatly
reduces errors and speeds refunds.
The new law applies to debt forgiven in 2007, 2008 or 2009.
Debt reduced through mortgage restructuring, as well as mortgage debt
forgiven in connection with a foreclosure, may qualify for this relief.
In most cases, eligible homeowners only need to fill out a few lines on
Form 982 (specifically, lines 1e, 2 and 10b).
The debt must have been used to buy, build or substantially
improve the taxpayer’s 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
mortgage principal, just before the refinancing.
Debt forgiven on second homes, rental property, business
property, credit cards or car loans does not qualify for the new
tax-relief provision. In some cases, however, other kinds of tax
relief, based on insolvency, for example, may be available. See Form
982 for details.
Borrowers whose debt is reduced or eliminated receive a
year-end statement (Form 1099-C) from their lender. For debt cancelled
in 2007, the lender was required to provide this form to the borrower
by Jan. 31, 2008. By law, this form must show the amount of debt
forgiven and the fair market value of any property given up through
foreclosure.
The IRS urges borrowers to check the Form 1099-C carefully.
Notify the lender immediately if any of the information shown is
incorrect. Borrowers should pay particular attention to the amount of
debt forgiven (Box 2) and the value listed for their home ( Box 7).
Related Items:
Frequently asked questions on the Mortgage
Forgiveness Debt Relief Act
Form
982, Reduction of Tax Attributes Due to Discharge of
Indebtedness
1099-C
Gene
Wunderlich - Selling Southwest California Homes including
Temecula, Murrieta & The Southern California Wine Country
Remember, Don’t wait to buy real
estate - Buy real estate and wait.
* This
article is posted as a
resource for clients specifically directed from
www.SouthwestCaliforniaHomes.com. All information is reprinted from
available public documents with attribution or linked to
other public
or corporate websites as a service to clients trying to find all this
information in one place.
