The National Association of REALTORS® sent out a call to action to its million-plus members this weekend, urging them to support an extension of tax relief on mortgage forgiveness.
Under federal law, cancelled debt is generally considered taxable income. Since 2007, however, the Mortgage Forgiveness Debt Relief Act has exempted home owners from paying taxes on the amount of money their mortgage lender forgives as a result of a loan modification, short sale, or foreclosure. The act is due to expire at the end of the year, but the bill would extend the relief through 2014.
“Over a quarter of all transactions still involve distressed properties. That is why you must take action now,” the association said in an e-mail sent Sunday. “Homeowners shouldn’t be forced to pay a tax on money they’ve already lost with cash they never received.”
The organization asked its members to contact their elected representatives and tell them to complete their “unfinished business” after the election. Legislation aimed at extending the act has been introduced in both houses of Congress with bipartisan support in all cases. Senate Bill 2250 has 19 co-sponsors and awaits action in the Finance Committee. In the House Committee on Ways and Means, House Resolutions 4202 and 4336 are identical versions of the Senate legislation, and have 47 and 34 co-sponsors, respectively.
“It’s enormously important that we support this legislation,” NAR President Moe Veissi said in a video to members. “This is a vital, important message not just for our community of REALTORS®, but for the American consumer.”
—Meg White, REALTOR® Magazine
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