This document provides information about tax rules regarding the cancellation of mortgage debt. It explains that forgiven mortgage debt is generally treated as taxable income, but a law passed in 2007 provides relief for forgiven mortgage debt secured by a primary residence until December 31, 2012. It details that the forgiven amount up to the original mortgage amount plus improvements can be excluded from income. It also answers questions about how the rules apply to short sales, foreclosures, refinances, and situations where a homeowner's debt is reduced but they remain in the home.
Lifetime mortgage is a long-term loan secured against the borrower’s property and is repaid when he/she dies or moves to the long-term care. It can be termed as the Flexible mortgage as it maintains financial stability in a pensioner’s life.
Lifetime mortgage is a long-term loan secured against the borrower’s property and is repaid when he/she dies or moves to the long-term care. It can be termed as the Flexible mortgage as it maintains financial stability in a pensioner’s life.
Mortgage Banking Seminar is part of the continuing series of training presentations for the Financial Services Industry. Check out our other presentations in this series and contact Saunders Learning Group if you have training needs. We can help, we have been doing training in the financial services industry for 30 years.
Financing is the first concern of all kind of home buying. When you apply for a loan for an under construction property, it is called a ‘home construction loan‘. Whereas when a loan for buying a fully constructed house is availed, it is called a ‘home loan‘.
Blog: https://financebuddha.com/blog/home-loan-vs-home-construction-loan
Home equity loans work best if there is a need for a huge amount. Such loans are much cheaper than personal loans or credit card loans.
Blog: http://thetazero.com/news/a-brief-on-home-equity-loans
This slide hopefully will help homeowners who are distressed with their mortgage can find useful information. Our experienced short sale team can provide valuable information to help homeowners understand their options to avoiding foreclosure.
What is the real cost of a mortgage? Should you be paying off your mortgage as fast as possible? If so, what is the safest way to do it? We show our clients how to lower their mortgage interest payments and total cost while maintaining access to their equity, without any changes to their current spending habits.
Gefen Financial - New York Mortgage Brokerguest2247c2
At Gefen Financial, we help people to manage their finances through debt consolidation, mortgages & loans for residential and commercial real estate properties, and equity financing.
Jimmy Vercellino is one of the nation’s top VA Home Loan mortgage originators. A Marine veteran, he and his team work hard to help veterans take advantage of their VA loan benefit and become homeowners. From start to finish, they guide their clients through the process and make it as smooth and stress-free as possible. Visit the site at https://www.valoansforvets.com
VA Loans for Vets NMLS#184169
5050 North 40th Street, Ste 260
Phoenix, AZ 85018
(602) 908-5849
A Right Approach For a Beneficial Home Loanmusunuruakhil
Awareness about the home loan products is very important for those who wish to seek a home loan. Failing to know or understand about these products may result in huge loss. You may end up in paying more to the bank in both principal and interest components. So a proper study on the products and services is a must to avoid such loses
How To Get Student Loan, How To Get Student Loans At Low Interest, How To Get Student Loans From Banks, How To Get Student Loans In Canada, How To Get Private Student Loans, How To Get Student Loans For Graduate School
Learn about reverse mortgage with the plain facts explaned on this slide presentation. Maggie O'Connell has been educating seniors for 23 years on HECM - FHA Reverse Mortgages and Jumbo / Private reverse mortgages. 800-489-0986
Mortgage Banking Seminar is part of the continuing series of training presentations for the Financial Services Industry. Check out our other presentations in this series and contact Saunders Learning Group if you have training needs. We can help, we have been doing training in the financial services industry for 30 years.
Financing is the first concern of all kind of home buying. When you apply for a loan for an under construction property, it is called a ‘home construction loan‘. Whereas when a loan for buying a fully constructed house is availed, it is called a ‘home loan‘.
Blog: https://financebuddha.com/blog/home-loan-vs-home-construction-loan
Home equity loans work best if there is a need for a huge amount. Such loans are much cheaper than personal loans or credit card loans.
Blog: http://thetazero.com/news/a-brief-on-home-equity-loans
This slide hopefully will help homeowners who are distressed with their mortgage can find useful information. Our experienced short sale team can provide valuable information to help homeowners understand their options to avoiding foreclosure.
What is the real cost of a mortgage? Should you be paying off your mortgage as fast as possible? If so, what is the safest way to do it? We show our clients how to lower their mortgage interest payments and total cost while maintaining access to their equity, without any changes to their current spending habits.
Gefen Financial - New York Mortgage Brokerguest2247c2
At Gefen Financial, we help people to manage their finances through debt consolidation, mortgages & loans for residential and commercial real estate properties, and equity financing.
Jimmy Vercellino is one of the nation’s top VA Home Loan mortgage originators. A Marine veteran, he and his team work hard to help veterans take advantage of their VA loan benefit and become homeowners. From start to finish, they guide their clients through the process and make it as smooth and stress-free as possible. Visit the site at https://www.valoansforvets.com
VA Loans for Vets NMLS#184169
5050 North 40th Street, Ste 260
Phoenix, AZ 85018
(602) 908-5849
A Right Approach For a Beneficial Home Loanmusunuruakhil
Awareness about the home loan products is very important for those who wish to seek a home loan. Failing to know or understand about these products may result in huge loss. You may end up in paying more to the bank in both principal and interest components. So a proper study on the products and services is a must to avoid such loses
How To Get Student Loan, How To Get Student Loans At Low Interest, How To Get Student Loans From Banks, How To Get Student Loans In Canada, How To Get Private Student Loans, How To Get Student Loans For Graduate School
Learn about reverse mortgage with the plain facts explaned on this slide presentation. Maggie O'Connell has been educating seniors for 23 years on HECM - FHA Reverse Mortgages and Jumbo / Private reverse mortgages. 800-489-0986
Dodd frank act impact on seller financing for investorsRichard Roop
In this month’s Ultimate Training Webinar we will be covering “Dodd Frank Acts Impact on Seller Financing for Investors” and when you attend you will learn:
•How the Safe Act and Dodd-Frank will affect seller financing going forward
•Who is the Consumer Financial Protection Bureau (CFPB) and what is the Dodd-Frank Act?
•How to safely grow your business in spite of the new Dodd-Frank Act
•How to properly use the ultimate strategy and be in compliance with the Dodd-Frank Act
•What is the difference between the SAFE Act and the Dodd-Frank Act
•How to Thrive as a Real Estate Investor Under the SAFE Act!
•What you MUST know to use seller carry-back from here on out!
In real estate, a short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagor.
Year-End Tax Planning and Financial Planning Ideas - Dec. 2011
Cancellation Of Mortgage Debt
1. What You Need to Know about Cancellation of Mortgage Debt
Posted By susanne On March 11, 2012 @ 1:07 pm In Consumer News and Advice,Home Owner
News,Real Estate Information,Today's Top Story,Today's Top Story - Consumer | No Comments
[1]
This column is brought to you by the NAR Real Estate Services group.
A lender will, on occasion, forgive some portion of a borrower’s debt. The general tax rule that applies
to any debt forgiveness is that the amount forgiven is treated as taxable income to the borrower.
Some exceptions to this rule are available, but, until recently, the borrower was required to pay tax on
the debt forgiven. A new law enacted in December 2007 provides relief to troubled borrowers when
some portion of mortgage debt is forgiven. However, this relief expires on December 31, 2012 and
NAR will be working to obtain an extension throughout the year.
Below is some general information you need to know about this law and cancellation of mortgage
debt.
General Rule for Debt Forgiveness
If a lender forgives some or all of an individual’s debts, the general rule is that the forgiven amount is
treated as ordinary income and the borrower must pay tax on the forgiven amount. Exceptions apply
for bankruptcy, insolvency and certain other situations, including mortgage debt.
Current Law for Mortgage Debt
(Jan. 1, 2007 through Dec. 31, 2012): A borrower can be excused from paying tax on forgiven
mortgage debt. The debt must be secured by a principal residence and the total amount of the
outstanding obligation may not exceed the original mortgage amount plus the cost of any
improvements.
Does the relief apply only to a sale?
No. The provision has broader application. Lenders might forgive some portion of mortgage debt in a
short sale (when value at sale is less than the amount owed) or in a foreclosure where the debt is
wiped out. In addition, if a borrower still living in the home is able to make an arrangement with a
lender that reduces the principal balance of a mortgage, the amount forgiven in that workout will not
be taxed.
Can the homeowners in a short sale or foreclosure claim a loss?
No. The loss is considered a personal loss and is, therefore, ineligible for either capital loss or ordinary
loss treatment.
What happens to the seller when mortgage debt is forgiven?
Until January 1, 2013, the homeowner will pay no tax on any forgiven amount.
Does this provision apply to a refinanced mortgage?
Only in limited circumstances. The relief provision can apply to either an original or a refinanced
mortgage. If the mortgage has been refinanced at any time, the relief is available only up to the
amount of the original debt (plus the cost of any improvements). Tax relief is generally not available
for second mortgages or home-equity lines of credit where the funds are not used for home
improvement. Any amount that is not eligible for the relief provision will be taxed as ordinary income.
How does the homeowner get the correct information to the IRS?
The lender is required to provide the homeowner and the IRS with a Form 1099 reflecting the amount
of the forgiven debt. The borrower/homeowner must file a Form 982 to reflect the amount forgiven
and to show the reason why the forgiven amount is not taxable. Any taxable portion of forgiven debt
will then be reported on the homeowner’s Form 1040 for the tax year in which the debt was forgiven.
2. What if a property declines in value but the owner stays in the house?
The provision would not apply. The provision applies only at the time of sale or other disposition or
when there is a workout (reduction of existing debt) with the lender.
Do all lenders forgive mortgage debt when property values decline or the home is in
foreclosure?
No. Some states have laws that allow a lender to require a repayment arrangement, particularly if the
borrower has other assets. Forgiveness of debt is always at the lender’s discretion.
Linda Goold is the Tax Counsel for National Association of REALTORS®.
Article printed from RISMedia: http://rismedia.com