|November 20, 2012
Contact: Whitney Ray
Phone: (850) 245-0150
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TALLAHASSEE, Fla. –Attorney General Pam Bondi and Connecticut Attorney General George Jepsen are leading the national effort by state attorneys general urging Congress to extend tax relief for consumers who have mortgage debt canceled or forgiven due to financial hardship or a decline in housing values. Forty-two state attorneys general have joined Attorney General Bondi and Attorney General Jepsen in signing on to a letter to U.S. House and Senate leaders requesting them to extend this distressed homeowner tax relief, which has been in effect since 2007 and is scheduled to expire Dec. 31, 2012.
“We are urging Congress to protect distressed homeowners who qualify for mortgage relief from encountering an unexpected tax bill from the IRS,” stated Attorney General Pam Bondi. “This tax relief is critical in helping Floridians keep their homes and get back on their feet.”
The impending expiration comes at a time when many homeowners nationwide are benefitting from the $25 billion national settlement agreement with the nation’s five largest loan servicing companies. A preliminary report released this week estimates the benefit to consumers nationally at over $26 billion. Many other banks across the country also offer mortgage modification and debt relief programs.
Under the federal Mortgage Debt Relief Act, in effect since 2007, mortgage debt that is forgiven after a foreclosure or short sale or through a loan modification provided to a homeowner in financial hardship may be excluded from a taxpayer’s calculation of taxable income. This exclusion only applies to mortgage debt forgiven on primary residences, not second homes.
Follow this link to view the letter: http://myfloridalegal.com/webfiles.nsf/WF/MMFD-928LF4/$file/Final+Tax+Relief+Letter.pdf