Here comes February, and here comes income tax time again. It seems like every year, income tax preparation companies try to find new ways to separate you from your money by not telling you everything. For example, if you made less than $53,000 last year, you can get your taxes prepared for you absolutely free of charge. Think tax preparers are going to tell you this?
There are more income tax tips in this video…
Columbia SC short sellers who completed short sales during 2014 and had mortgage debt cancelled, got a huge 11th-hour tax break when the Senate extended the Mortgage Debt Forgiveness Act.
The average Columbia SC short sellers had a mortgage balance one and a half times higher than the market value of the house.
Big Break for Columbia SC Short Sellers
Normally, the Internal Revenue Service treats forgiven debt as ordinary income going to the borrower, taxable at regular rates.
But under an exception for forgiven mortgage that took effect in 2007, qualified borrowers that saw their debt cancelled by a lender as part of a short sale, loan modification or foreclosure do not have to pay taxes on the wiped out debt. Lawmakers averted the exemption's expiration on December 31, 2014.
In a short sale, the homeowner agrees to sell the property, typically for a price well below what is owed to the bank. The difference between the sale price and the total amount owed can be forgiven by the lender.
Those Columbia SC short sellers who fall under the tax break under the Mortgage Forgiveness Debt Relief Act should receive Form 1099C (Cancellation of Debt) from their lender, if the amount of cancelled debt was more than $600.
Following the passage of the extenders bill, the IRS said that it anticipates opening the 2015 filing season as scheduled this month. The IRS will begin accepting tax returns electronically on January 20th. Paper tax returns will begin processing at the same time.
Get more information about Taxes and how Columbia SC short sellers may be affected in our section on Taxes to your right under Columbia SC Real Estate Categories.
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As we turn the calendar on yet another year, it's time to start thinking about income taxes once again. How much do you know about taxes? Take this pop quiz and see if you do as well as the guy interviewed on the street in Times Square…
With the holidays upon us, you're probably thinking about gifts and relatives. But that's not all you should be thinking about. Take 30 minutes now to plan for next April, and that half hour could save money ($1000 or more) come tax time. Here's how…
Until the Mortgage Debt Forgiveness relief act was created in 2007, a person who short sold his home had to pay the IRS income tax and the mortgage debt forgiven in a short sale or mortgage term work out on his home. Clearly that made short selling and certain modifications impossible for many.
If distressed homeowners had to pay tax on the phantom income from mortgage debt forgiveness, many may have no choice but to go into foreclosure.
The Mortgage Debt Forgiveness act was created so that homeowners and banks and affected communities could utilize alternatives and avoid the negative impact of a foreclosure. But congress allowed the act to expire at the end of 2013…
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Check out our other articles and tips on taxes that affect Columbia SC homeowners by clicking on the Taxes link to your right under Columbia SC Real Estate Categories.