Anyone know what the deal is with this? Was it extended? I can't tell from all of the articles I've found. This will have a significant impact on our housing market and since we're looking to buy in 2013 I've been waiting for info.
Page 25: SEC. 202. EXTENSION OF EXCLUSION FROM GROSS INCOME 18 OF DISCHARGE OF QUALIFIED PRINCIPAL 19 RESIDENCE INDEBTEDNESS. 20 (a) I N G ENERAL .—Subparagraph (E) of section 21 108(a)(1) is amended by striking ‘‘January 1, 2013’’ and 22 inserting ‘‘January 1, 2014’’.
Page 25: SEC. 202. EXTENSION OF EXCLUSION FROM GROSS INCOME 18 OF DISCHARGE OF QUALIFIED PRINCIPAL 19 RESIDENCE INDEBTEDNESS. 20 (a) I N G ENERAL .—Subparagraph (E) of section 21 108(a)(1) is amended by striking ‘‘January 1, 2013’’ and 22 inserting ‘‘January 1, 2014’’.
awesome thank you, I did a word search and couldn't find it. this is exactly what I was looking for!
Does this mean that those who go through foreclosure or a short sale still do not have to declare forgiven debt as income on their taxes for 2013?
Yes. Are you considering short saling your condo
Haha. I have been considering it for 5 years.
Unfortunately my understanding is that the bank will never ever approve me for a short sale because of our income/lack of financial hardship.
And actually at this point I think it could probably sell for maybe just $5K less than I owe on it (on paper). But then I would still need to pay the REA fees.
Trains - I have seen ppl with zero financial hardship get SS approved, just FYI. It comes down to a numbers game for the bank from what I have seen.
My mortgage is owned by a local bank and they have been completely unwilling to work with me. :-( It's not backed by fannie/freddie, either.
Honestly, the biggest issue is that the mortgage rules changed after I bought it, and it actually means that it does not qualify for a fannie/freddie mortgage because of the ratio of commercial to residential units. I am seriously doubting how anyone will be able to get financing for it.
One of the other owners just did a refi and he had to get a variance from fannie/freddie to do the refi. It took 6 months.
Post by snakeoiltanker on Jan 1, 2013 16:26:50 GMT -5
Thank you for asking this question. Iv also been googling for this and came up with nothing. I should have known someone on here would have the answer.
carrots, i think it has to be your primary residence in order to qualify. i forget exactly what qualifies as primary residence--there are specific conditions that define it. if she talked to her cpa and/or a real estate attorney in her state, they could determine pretty quickly if she qualifies or not or maybe is in some grey area.
ETA: definition of primary residence is on the IRS' website somewhere.
Post by thatgirl2478 on Jan 1, 2013 22:56:40 GMT -5
And again, the gov is helping those who were 'irresponsible' (a widely sweeping generalization - I KNOW), and doesn't do jack for those who tried to take the responsible way out.
We had to move in 2011 for my DH's job. We put the house on the market for what we owed on it. Nothing. Then we decided to stop hemorrhaging money and put the house up for rent. Which effectively made it an 'income property' even though without that renter we wouldn't have been able to keep insurance & who knows what would have happened then... So we WANTED to refinance but since it's now an 'income property' we CAN'T (HARP 2.0 will help home owners with their primary home, but income property 'landlords' still have to have 25% ish equity even when refinancing).
Now, even if we COULD qualify for a short sale, we'd end up having to include that forgiven debt in our income anyway since from what I can tell from the IRS's publication it has to be your primary residence. Can't sell the house for what we owe, don't have the money to bring to the table.
check with your cpa and real estate agent, thatgirl. If you had to move for work that may be something that will exempt you from the primary residence exclusion.