The income tax exemption on mortgage debt forgiven in a short sale or a workout for principal residences expired at the end of 2013. Without immediate action by Congress, distressed homeowners will have to pay tax on “phantom income” from forgiven debt. Many families have decided not to go through with short sales or seek workouts because of the uncertainty over the status of the waiver. This is not only unfair but harms families, neighborhoods and communities. Please urge your representative and senators in Congress to extend this tax relief now.
- Despite significant market recovery, more than 5 million are still “under water.”
- Nearly 1 million households are seriously delinquent on their mortgages or in foreclosure.
- Mortgage debt forgiveness tax relief is vital for these families.