A little bit of relief
In December Congress recessed but failed to address vital provisions that would provide relief to homeowners. The National Association of Realtors supports extending these provisions into 2017 and beyond. One of the provisions, Mortgage Cancellation Relief, helps homeowners by forgiving mortgage debt in short sales.
The Mortgage Forgiveness Debt Relief Act was first passed in 2007 and then extended until 2016. Homeowners who had their debt reduced or forgiven through mortgage restructuring qualified for the relief. In addition, mortgage insurance premium deductions helped homeowners when purchasing a home, especially for the first time.
While Congress continues to contemplate on whether or not to extend tax relief, homeowners should know that these provisions are still available when filing taxes for 2016. It has been a common misunderstanding that since these expired at the end of last year, they are unavailable.
However, realtors should inform their clients that this is untrue.
By making it known that relief is still available, at least for during the tax season this year, homeowners can take advantage of these provisions. The National Association of Realtors encourages realtors to make this known to their clients, and spread awareness before taxes are filed in the next few months.
Might not hold true next year
As for 2017 taxes, the verdict is still out.
Although the National Association of Realtors and homeowners are in favor of extending this tax relief package, Congress makes the ultimate decision. Whether they agree with the current acts as they are written or not, what everyone would like to see is more work being done for the sake of homeowners.
The most important take-away is that this relief is still available during this tax season.
Time will tell if more relief will be provided in the future or if Congress will amend the recently expired provisions.