Sunday, March 2, 2008

Mortgage Claim Release Act:

We all are aware of the rising mortgage debt foreclosures in America today. In conjunction of our recessed economy and the erroneous loans that mortgage companies are issuing, there is no relief for those with outstanding balances. Unfortunately there are loan companies that have been approving anybody and everybody (so to speak) for loans in the past. Presently there is an over saturation of homes today and mortgage companies are tightening their grip of qualifying applicants.
According to the IRS, a bill was passed called the Mortgage Forgiveness Debt Relief Act of 2007, enacted on December 20, insuring taxpayers some relief on their returns. Homeowners whose debt was partially or entirely forgiven during 2007, may be able to claim special tax relief by filling out a Form 982 along with attaching it to their 2007 federal income tax returns. IRS Commissioner Linda Staff is encouraging those people in this qualified debt to take full advantage of this opportunity.
Normally debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act. of 2007, 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 a filing separate return. Keep in mind that the new law applies to debt forgiven in 2007,2008,2009. Debt. This enactment is for qualified homeowners of debt foreclosure and the debt restructuring of a home. The debt must have been used to buy, build, or substantially improve the taxpayer's residence. Debt use to refinance qualifying debt is also eligible for exclusion, but only up to the amount of the old mortgage principal, just before refinancing.

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