I really don’t like pressure. I prefer to work and manage my life in a planned manner to avoid pressure and stress. But if you are an “upsidedown” homeowner considering a short sale…the pressure IS ON.
Time is running out on tax amnesty for short sales and foreclosure
A couple of years ago, Congress decided to give homeowners who were losing their homes a break from the additional tax hit they would normally sustain when their lenders forgave part of the debts they owed.
Now with a federal government annual deficit well above a trillion dollars and an ever increasing federal debt, we don’t know if there will be much enthusiasm to extend this break for homeowners.
As an example, if you purchased a home at the height of the real estate bubble in a fast growing real estate market like the Metro Phoenix Area, you might have seen your home value drop in half. Suppose you purchased a home for $300,000 with a mortgage of $240,000. And lets say now that your home is now worth $150,000. If you sell that home in a short sale, your lender may forgive $90,000 of debt.
BUT…if the short sale happens after December 31, 2012, that forgiven $90,000 will be added to your income tax liability and you will most likely climb the income tax bracket ladder. You also may have to pay a higher state income tax rate.
The $90,000 forgiven debt from your lender could end up costing you upwards of $30,000 in additional income taxes. So not only would you have lost your initial down payment in the home …but you could also take an additional hit of $30,000 on your income taxes.
Here’s a heads-up to all homeowners facing foreclosure or a short sale:
You have the common the goal of closing your deal by the end of 2012.
Most short sales take months to complete. SO NOW IS THE TIME PEOPLE! Call me to talk about YOUR situation and let’s see what makes the best sense for you.
Could congress extend the “gift” they have given us of forgiving the taxes on the forgiven debt? Yes. Will they? Who knows.
I have a terrific record of getting the banks to agree to short sales. Not all agents are qualified and experienced in this specialized area.
Call me at 602-504-3898 or send me a text… or e-mail Adele@AdeleCoffman.com AND HURRY…let’s get going!