Mortgage Debt Relief Act

Mortgage Restructuring & Debt Relief


If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable.

mortgage-restructuring-and-debt-reliefThe Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

Visit the IRS’ website for more information, including a detailed list of frequently asked questions. If you have questions, don’t hesitate to contact Starting Point Home Solutions at 636-573-1200.

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Starting Point Real Estate LLC is a Real Estate Re-development Co. specializing in the St Louis & St Charles areas. With over 15 years of experience buying and redeveloping homes in the area, Starting Point RE has become St. Louis' go to Real estate company. Starting Point Real Estate has also helped home owners avoid foreclosure and restore their bank accounts. Contact Starting Point Real Estate today if you need assistance in selling your home fast for cash.

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