Congress Provides Relief from Mortgage Debt Forgiveness
On December 20, 2007, the President signed into law the Mortgage Forgiveness Debt Relief Act of 2007. This act provides for an exclusion from gross income of up to $2 million of any discharge of qualified principal residence indebtedness occurring after December 31, 2006 and before January 1, 2010. The exclusion does not apply to a second home, vacation home, business or investment property. Additionally, the exclusion does not apply to a discharge of a second mortgage or home equity loans unless the proceeds were used to acquire, construct or substantially improve the taxpayer’s principal residence.
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To find out how the Mortgage Forgiveness Debt Relief Act of 2007 affects you, please contact your Howard, Wershbale & Co. Tax Professional or visit our Tax Planning Services page.