Now is the Time to Sell your Home!

Now is the time to act if you need to sell your home through a short sale!!

Unless the current law gets extended, a short sale could cost homeowners money after Dec. 31, 2012. To halt a law change that could potentially bog down these home sales, the National Association of Realtors® (NAR) issued a Call for Action, asking all Realtor members to contact their personal lawmakers through NAR’s Call for Action website.

In a short sale, a lender forgives part of the mortgage and allows the homeowners to move. In general, the money they forgive is considered income to the seller – money they owed that they no longer owe. As a result, the Internal Revenue Service considers it taxable income on a short seller’s income tax.

A law currently in effect voids the forgiven amount as income. However, it expires Dec. 31. When a Realtor participates in the Call for Action, he’s asking the lawmakers who represent his district to extend the tax forgiveness currently in effect.

“Without an extension (of existing law), families engaged in loan modifications, short sales or foreclosures will face a big tax bill,” NAR President Moe Veissi said in an email sent to members. “Homeowners shouldn’t be forced to pay a tax on money they’ve already lost with cash they never received.”