The South Florida Business Journal points out a little-noticed nugget in the deal to stop tax hikes on most Americans: an extension of the Mortgage Debt Relief Act…
“This extension will help struggling homeowners take full advantage of the assistance offered them by the national mortgage settlement and other foreclosure relief programs,” Florida Attorney General Pam Bondi stated in a news release.
The law gives homeowners an exemption on their taxes when they obtain debt forgiveness – so it will help turn around distressed properties and short sales. Without the extension, homeowners would be expected to pay taxes on the forgiven debt. That would really suck for people finally getting their mortgages righted through the mortgage settlement from last year.