Sub-prime Lending (Real Estate)
2/26/2008 6:59:01 PM EST
Gerald M. Levinson on the Mortgage Forgiveness Debt Relief Act of 2007
Tax Attorney and Founder of Benefits Research & Communications in Escondido, California
Because of the rash of mortgage defaults and foreclosures, and the overall turmoil in the housing market, last December Congress passed and the President signed into law the Mortgage Forgiveness Debt Relief Act of 2007. While this law offers struggling homeowners some help by excluding from taxable income the amount of forgiven or cancelled mortgage debt, the law is effective for a limited period and there are limitations on the relief the law provides.
Mr. Levinson writes: “Because of the rash of mortgage defaults and foreclosures, and the overall turmoil in the housing market, last December Congress passed and the President signed into law the Mortgage Forgiveness Debt Relief Act of 2007 (the ‘MFDRA,’ P.L. 110-142). While this law offers struggling homeowners some help by excluding from taxable income the amount of forgiven or cancelled mortgage debt, the law is effective for only a limited period and there are limitations and restrictions on the relief the law provides. What’s more, the MFDRA is not a panacea and has been criticized for providing insufficient and belated assistance to those fighting to save their homes.”
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