A little over a week ago the House of Representatives approved a bill that would offer a vital tax break to Americans who sold their homes for less than they owed this past year. This bill would be an extension of the Mortgage Debt Forgiveness Act was originally passed in 2007, and is now headed to the Senate where it will need to be voted on again.
Typically, if a homeowner sells a property for less than what they owe on the mortgage they would be required to report that difference as taxable income. This bill would allow those homeowners the opportunity to omit that forgiven debt in their totaled income calculations. This is great news for people could not afford to keep their homes this past year and had to take a chance selling them through a short sale, even though it was unclear whether the bill would get renewed for 2015.
In addition to assisting financially distressed homeowners, this bill will also help to stimulate the housing market overall by allowing people the opportunity to sell homes they cannot afford before they fall into foreclosure. Analysis provided by the Urban Institute predicts that the tax break is going to benefit around 2 million people who are drastically in debt and unable to pay their mortgage. This relief program allows people a profitable alternative to remaining in homes they cannot afford, many of which eventually have been foreclosed upon.
If passed by the Senate, this tax break could help millions of Americans get back on their feet while simultaneously reducing foreclosure rates and stimulating the real estate market. Things bode well for the bill as it has been approved multiple times in the past, and with more homes on the market 2015 is looking to be an excellent year to invest in a commercial or residential property. It you are interested in seeing what Miami real estate has to offer, contact a RE/MAX agent today!