Don’t tax “Phantom Income” on short sales

Congress has begun its “Lame Duck” session with a big list of unfinished business items.  Number one on that list for REALTORS® is an extension of “The Mortgage Forgiveness Tax Relief Act.”

This bipartisan legislation would extend an expired provision that has helped millions of distressed American families by allowing tax relief for homeowners when lenders forgive some portion of the mortgage debt they owe. Today’s housing market is finally recovering. However, there are still too many homeowners unable to meet their mortgage obligations.  

Estimates show that about 5.3 million homes are still under water. In addition, there are still more than 1 million homes in the process of foreclosure.

If “The Mortgage Forgiveness Tax Relief Act” is not enacted, hundreds of thousands of American families who did the right thing by short-selling their home (see: Short Sales) or received a much needed loan reduction from their lender will have to pay income tax on “phantom income.”

Urge your Member of Congress and Senators to act on “The Mortgage Forgiveness Tax Relief Act” before the end of 2014 and help provide certainty for struggling homeowners and stability for our nation’s housing markets.

For more information, please see the follow:

http://www.latimes.com/business/realestate/la-fi-harney-20140914-story.html

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.