Great News!
Congress has extended The Mortgage
Forgiveness Debt Relief Act of 2007 through January 1, 2014 by way of The
American Taxpayer Relief Act of 2012 (more popularly known by the fear inducing
name of The Fiscal Cliff Bill).
If you recall, The Mortgage
Forgiveness Debt Relief Act made it so taxpayers did not have to report income
gained from debt forgiveness on their principal residence should the debt be
reduced by mortgage restructuring or in connection with a foreclosure.
The fate of the Act was in
limbo for a while as it was set to expire on December 31, 2012 with no word as
to if it would be renewed.
Here’s the provision from The
American Taxpayer Relief Act of 2012 extending the Mortgage Forgiveness Debt
Relief Act for another year:
“SEC.
202. EXTENSION OF EXCLUSION FROM GROSS INCOME OF DISCHARGE OF QUALIFIED
PRINCIPAL RESIDENCE INDEBTEDNESS.
(a) IN GENERAL.—Subparagraph
(E) of section 108(a)(1) is amended by striking ‘‘January 1, 2013’’ and
inserting ‘‘January 1, 2014’’. (b) EFFECTIVE DATE.—The amendment made by this
section shall apply to indebtedness discharged after December 31, 2012. "
To review the full Bill, click here.
