Has your Scottsdale realtor told you that the Mortgage Forgiveness Debt Relief Act is set to expire at the end of the year? Did they perhaps mention it to you but you’ve forgotten what it all entails? One Scottsdale realtor at The Jason Dawson Team explains that the Mortgage Forgiveness Debt Relief Act applies to homeowners that complete a short sale on their home; it essentially makes them exempt from paying taxes on the forgiven amount in their short sale.
The MFDRA was established back in 2007 as a way to provide tax relief to those homeowners that completed a short sale on their property; throughout the years it has saved distressed property owners thousands of dollars when it comes time for them to pay their taxes. Scottsdale realtors at The Jason Dawson Team explain how it works. When you complete a short sale on your home, you sell it for less than what you owe the bank. The difference between these two numbers is known as the deficient amount, which the IRS treats as taxable income. For example, if you sold your home for $350,000 but owed the bank $400,000 you would be liable to pay taxes on the $50,000 difference. Generally speaking, homeowners that have just completed a short sale aren’t in a financial position to afford paying taxes on thousands of dollars says Scottsdale Realtor Jason Dawson; this is where the MFDRA comes into play. For qualifying homeowners, such as those completing a short sale on their primary residence, the MFDRA allows them to be exempt from paying taxes on that forgiven amount. There are other stipulations to the program, but if you are about to complete a short sale on your property you should ask your Scottsdale realtor about this money-saving tax relief program.
If you are still looking for information on the Mortgage Forgiveness Debt Relief Act or are searching for a Scottsdale realtor to help you with your short sale contact The Jason Dawson Team today. They are one of the most experienced Scottsdale realtors when it comes to short sales and can provide you with the help and information that you’re looking for.