Law allows tax relief for mortgage debt forgiveness

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A new law allows homeowners whose mortgage debt was partly or entirely forgiven during 2007 to claim special tax relief.

The Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec. 20, allows eligible homeowners to fill out newly revised Form 982 and attach it to their 2007 federal income tax return.

Normally, debt forgiveness would result in taxable income. But under the new law, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was less than $2 million (for a married couple filing jointly).

Details and instructions about Form 982 are available at www.IRS.gov.

One Response to Law allows tax relief for mortgage debt forgiveness

  1. When someone is dealing with money troubles it is easy to lose control and end up creating more debt while trying to pay off existing debt! If someone finds themselves in a situation where they are living outside their means they should get some advice from professionals who can help them with their problems and assist in implementing a debt consolidation programme.

    debt consolidation
    February 27, 2008 at 10:20 am