Possible Good News for Homeowners and Tax Benefits

Filed under: Mortage Industry News

tax benefitsThere is some potential positive news for homeowners that focuses on popular tax benefits, including write-offs for energy-saving improvements, mortgage insurance premiums, and the benefit allowing for mortgage debt forgiveness.

If you didn’t already know, there were 50+ corporate and individual tax benefits that expired in December and “The House” didn’t take any action to extend these benefits.

According to a recent article by Kenneth R. Harney, even though there has not been an actual formal announcement on the extension of these benefits, the Senate Finance Committee, now led by Chairman Ron Wyden, expects to take up an “extenders” package sometime this spring.

The article stated that according to a source with direct knowledge of the committee’s plans,”This is high on Wyden’s priority list.”

So, some of these expired housing benefits could become active again.

One of the most important on this list is the Mortgage Forgiveness Debt Relief Act, a law that has saved a plethora of homeowners from huge tax bills. The law said that when a homeowner is relieved of a debt burden by a creditor, the amount forgiven is treated as income subject to taxation at ordinary rates.

And for qualified homeowners whose mortgage debt was reduced or written off by lenders in connection with loan modifications and short sales, the forgiven amounts wouldn’t be taxable.

In addition, other benefits that weren’t extended were the $2,000 tax credit for construction of energy-efficient new homes, deductions for home improvements that conserve energy, and write-offs for the mortgage insurance premiums.

According to Harney, the home energy conservation tax programs are also likely to be included in the Senate bill.

Harney also stated that even though Wyden is definitely planning to take up this “extender” bill soon, it does not guarantee that any specific tax law provision will be part of the bill the Finance Committee will eventually consider, although  most tax analysts do expect that a final bill will include some form of renewal.

In his article, Harney concluded by saying that even though there are hurdles ahead, the outlook for renewal of mortgage forgiveness debt relief, and possibly other housing benefits, looks more promising than it did a few months ago.

If you are in the market of purchasing a home, or have any questions about the mortgage industry, please feel free to call me and we can discuss whatever is on your mind.

Source: http://bostonherald.com/business/real_estate/2014/03/hope_for_mortgage_forgiveness_tax_relief_extenders


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