Mortgage Debt Forgiveness Act 2007 – 2012

Here is a PDF of the www.IRS.gov web site where I searched for information concerning the mortgage debt forgiveness act.  I don’t post this attachment to give tax or legal advice, but to help struggling homeowners ask better questions to their licensed/certified professionals when weighing the significant elements of a serious decision.  In my experience of closing 72 short sales in the last 2 1/2 years, one of the first things I ask all of my clients to do is consult with their CPA – things are not always so cut-and-dry; however, by doing this, I have found that many tax preparers and CPAs are not well versed with the particular IRS codes governing Short sales (pre-foreclosure sales) and foreclosures – if at all.  As a service to those professionals as a part of their consultation to their clients, I always include the financial analysis we compile to qualify a short sale along with a list of questions to review with their clients including the topics of: insolvency, state income tax, and federal income tax — not to mention whether the property in question was ever refinanced, and if so, what that money was used for (both because it plays into the actual short sale negotiation with the various lenders, but also can have SIGNIFCANT tax implications for the homeowner/property owner).