TALLAHASSEE, FL – January 02, 2012 – (RealEstateRama) — Attorney General Pam Bondi issued the following statement on Congress’ one-year tax relief extension for consumers who have mortgage debt canceled or forgiven due to financial hardship or a decline in housing values.
“The one-year tax relief extension for Florida’s distressed homeowners is a substantial victory for homeowners who have mortgage debt forgiven. This extension will help struggling homeowners take full advantage of the assistance offered them by the national mortgage settlement and other foreclosure relief programs. We need to continue to do everything we can to help Floridians who are doing the best they can to pay their bills and stay in their homes,” stated Attorney General Pam Bondi.
Under the federal Mortgage Debt Relief Act, in effect since 2007, mortgage debt that is forgiven after a foreclosure or short sale or through a loan modification provided to a homeowner in financial hardship may be excluded from a taxpayer’s calculation of taxable income. This exclusion only applies to mortgage debt forgiven on primary residences, not second homes.
Forty-two state attorneys general joined Attorney General Bondi and Attorney General Jepsen in signing on to a letter to U.S. House and Senate leaders requesting them to extend this distressed homeowner tax relief. The relief has been extended until Jan. 1, 2014.
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