Without an extension of this bill, anytime after December 31st 2012, if a homeowner receives any type of principal reduction from their mortgage lender-they are going to be taxed by the IRS on whatever the principal reduction was-as if it was income
(PRWEB) November 26, 2012
The Homeowners Consumer Center is urging the US Congress, and President Obama to immediately extend the Mortgage Forgiveness Tax Provisions that are set to expire at midnight December 31st 2012. The group fears millions of US homeowners, who owe more on their home than it is worth have no clue that without this extension prior to midnight December 31st 2012, they could get a giant tax bill if they attempt to do a loan modification, a short sale, go through a foreclosure in 2013-if a reduction in the principal of the mortgage is involved. The Homeowners Consumer Center says, "We do not think most current underwater US homeowners realize that without this mortgage forgiveness tax provision extension they, or their neighbors are about to get hit with what could be a gigantic federal tax bill, should they do a short sale, a loan modification, or a deed in lieu of foreclosure-that involves a mortgage principal reduction in what they owe their mortgage lender. Without an extension of this bill, anytime after December 31st 2012, if a homeowner receives any type of principal reduction from their mortgage lender-they are going to be taxed by the IRS on whatever the principal reduction was-as if it was income. Without an immediate extension of this legislation we fear there could be a stampede of US homeowners doing a deed in lieu, and walking away from their home prior to December 31st 2012." http://HomeownersConsumerCenter.Com
The Homeowners Consumer Center believes its not just the US homeowners who owe more on their homes than they are worth that will be the only casualties if the Mortgage Forgiveness Tax Provisions are not extended by the US Congress & the Obama Administration. The group believes additional casualties include:
- All US homeowners. The Homeowners Consumer Center says, "If we get millions of new deed in lieu of foreclosures prior to December 31st 2012 because the US Congress did not extend the Mortgage Forgiveness Tax Provisions-it lowers the value of all US residential real estate markets nationwide."
- The thousands of real estate agents that specialize in short sales would suddenly be unemployed. What homeowner is going to do a short sale on their under water home if they get taxed on the principal reduction-as ordinary income?
- Mortgage lenders, banks, mortgage brokers, and law firms that specialize in loan modifications will also be joining the unemployment lines-what homeowner-who owes more on their home than it is worth would want to do a loan modification if the principal reduction is taxed as ordinary income?
- A sudden influx of millions of instant deed in lieu of home foreclosures prior to December 31st 2012 could be disastrous for the US economy, and global financial markets.
The Homeowners Consumer Center says, "What happens to the 22.8% of all US homeowners, who are upside down on their home mortgage when they all of a sudden realize-if they don't walk away from their homes now-they might get taxed on a principal reduction in 2013, if they do a loan modification, a short sale, a deed in lieu, or anything involving a principal reduction from their bank? At this moment we are saying if the US Congress, and the Obama Administration do not extend the Mortgage Forgiveness Tax Provisions now-we are going to have a gigantic mess on our hands, and its going to start long before December 31st 2012." http://HomeownersConsumerCenter.Com