Mortgage rule changes in 2015

SOURCE: Mortgage News Feed

The debt reduced through mortgage modifications or short sales is considered gain or income by the IRS and therefore taxable, creating a situation in which an individual would have a large tax liability without actually realizing the cash to pay it. In 2007, a bill (Mortgage Forgiveness Debt Relief Act) was passed that allowed homeowners an exclusion of income as a result of debt reduction on their principal residence. 

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