Considering a Short Sale in 2013? How the Fiscal Cliff Negotiations Will Benefit You

The Mortgage Forgiveness Debt Relief Act was set to expire January 1, 2013, meaning that homeowners who complete a short sale after that date would be taxed on the deficiency that the bank accepted as if it were income. This would put many struggling homeowners in a bind. While they are no longer responsible for the deficiency to the mortgage company, they are left with a large tax burden. Luckily, this has been extended for another year under the fiscal cliff negotiations. If you are considering a short sale, please speak with your tax adviser, as they affect everyone differently depending on their income and tax situation.