January 02, 2014 /24-7PressRelease/
-- Tax consequences looming for loan forgiveness for underwater homeowners?
Many Oregon homeowners are starting to see increases in the value of their property. For those who purchased homes recently, this is a very positive development, as it is allowing them to build up equity in their homes. However, those who purchased when values were at their peak may still find themselves trapped into a difficult position, as their homes may be worth substantially less than the amount of their mortgages.
This has led many underwater homeowners to experience significant financial hardships, resulting in some losing their homes to foreclosure
. Those who wish to remain in their homes have had to consider a host of options in the hopes that something will allow them to keep their property. Some have attempted to modify their mortgages with their lenders, either through a short sale or loan modification, but homeowners need to be aware of the potential consequences that may arise when making these agreements.
When the balance of a mortgage is reduced, the difference between the original amount of the mortgage and the new agreement is generally considered income for the homeowner. Since it is income, the homeowner will have to pay taxes on the amount of income received.
The Mortgage Forgiveness Debt Relief Act had provided protections to these homeowners by eliminating any tax consequences that they may have faced. This often was extremely beneficial to these individuals, as many were already struggling with serious financial problems. These tax burdens would often add to the issues that they were experiencing.
Despite the fact that many homeowners are still stuck in bad situations, this particular act is set to expire very soon if it is not extended by Congress. Those who are considering taking advantage of these provisions may find themselves out of luck if they receive income as a result of loan forgiveness.
If you are falling behind on your mortgage, you need to understand that this is a very serious situation. You may think that you will be able to resolve the challenges that you are facing, but failing to address the issue as soon as possible will often only make your situation worse.
You should speak to an experienced bankruptcy attorney immediately in order to preserve as many options as possible. An attorney can ensure that you are completely educated on all of the potential decisions that you have to make, and work together with you to create a plan that allows you to possibly remain in your home.
It can be difficult to admit that you need help, but you do not have to do all of this on your own. Any solutions to your financial problems can make sure that you are able to protect yourself from similar issues arising in the future.
Article provided by The Law Offices of Alexzander C. J. Adams, P.C.
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