Current law relieves mortgage debtors from having to report forgiveness of mortgage debt through principal reduction as income – even if the mortgage debtor has gotten a discharge on the mortgage through bankruptcy.
However, this law expires at the end of 2012. Unless Congress extends this law, those who receive forgiveness of mortgage debt will have to report their principal reductions as income.
See IRS Publication 4681.
James Robert Deal
Real Estate Attorney
Real Estate Managing Broker
James@JamesDeal.com
PO Box 2276 Lynnwood WA 98036
Telephone: 425-774-6611
Cell-Text: 425-670-1405
Fax: 425-776-8081
eXp Realty
Broker Lic #: 27330
2815 Elliott Ave, Suite 100
Seattle WA 98121
eXp DOL Licensing: 4484
NWMLS #: 9393
Office Phone: 888-317-5197
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