Attorney General Bondi Advocates for Extended Tax Relief for Distressed Homeowners

Nov 20 • 409 Views • View Comments

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John Lucas
Phone: 850.245.0150

Attorney General Bondi Advocates for Extended Tax Relief for Distressed Homeowners

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:$file/Final+Tax

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