A major tax break for homeowners who do short sales is scheduled to disappear at the end of the year. The 2007 Mortgage Forgiveness Debt Relief Act allows homeowners to short sell their home and not pay tax on the amount forgiven. It is scheduled to expire six months from now, on December 31, 2012. It takes anywhere from 5-9 months to do a short sale. So if you are considering short selling your home in Scottsdale, you better start soon. You definitely want the short sale to be completed before December 31st, 2012 to get that tax break.
If you are underwater on your home and owe more than the home is worth, the last thing you want is an additional tax burden for selling the home. It just makes a bad situation worse. If your short sale is completed after the act expires, you will be responsible for paying tax on the difference between what the home sold for and the amount you owed on your mortgage.
Call Carmen Brodeur with any questions about listing your home for sale.
Carmen Brodeur JD
Trillium Properties, LLC
9825 E Bell Road, Suite 120, Scottsdale AZ 85260