The United States House of Representatives extended the income tax exemption on mortgage debt forgiven in a short sale or a workout for principal residences. 

This legislation protects homeowners who completed a short sale or a workout in 2014 from debt cancellation tax being levied by the Internal Revenue Service.
The good news for our short sale clients is the tax law provides that the forgiven debt from the discharge of mortgage debt on a personal residence is excluded from gross income and therefore not taxable. The relief is effective retroactive to Jan. 1, 2014.
 
The not as good news is that it expires again in just a few weeks, on Dec. 31, 2014 and distressed homeowners considering a short sale in 2015 will again face the uncertainty of the extension of tax relief.  We remain hopeful that it will be extended through 2015 before next December.
 
We will keep you updated in regard to this matter in the upcoming months. 

If you have questions feel free to call attorney, Renee Roman at