Tag Archives: Mortgage Forgiveness Debt Relief Act of 2007

Good news for California homeowners facing short sales

short saleUnder regular tax rules, when a lender forgives a debt — that is, relieves the borrower from having to pay it back — the amount of the debt is taxable income to the borrower.

A homeowner who has $100,000 in mortgage debt forgiven through a short sale, for example, would have to pay income tax on the $100,000.

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