3 important provisions from the recently passed Federal “fiscal cliff” legislation

Here are 3 important provisions from the recently passed Federal “fiscal cliff” legislation:

·         Extension of the Mortgage Debt Forgiveness Act was included, providing protection for homeowners seeking a short sale, a deed-in-lieu of foreclosure, foreclosure or loan modification.  Without the passage of the extension many homeowners would be subject to additional taxes based on the amount forgiven. The extension is through 12/31/2013.*

·         Legislators also left in place exemptions for profits on home sales, and kept the mortgage-interest deductions.

·         Borrowers with mortgage insurance, from private guarantors or the U.S. government, will be able to deduct their premiums. That perquisite had expired at the end of 2011. The change will apply retroactively to 2012 for homeowners making less than $110,000 a year and will remain in force this year, through 2013.

Hope your New Year is off to a great start!