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Mortgage Forgiveness Debt Relief Act of 2007 passed
The "insolvency exception to the debt forgiveness rule" has been part
of the tax code since the beginning of time. Insolvency is proven
either by the old fashioned method of assets minus liabilities or the
presumption of insolvency arising from the commencement of a
bankruptcy case. This legislation is mere political window covering.
wrote:
>
> I didn't see this reported in our listserv, and you all probably know
> anyway, but...
>
> http://www.whitehouse.gov/news/releases ... 220-6.html
> President Bush Signs H.R. 3648
>
> The way I understand it, foreclosures on a primary residence after
1/1/07
> don't result in a 1099-C. Otherwise this could be tens of thousands of
> income ("ascension to wealth") on which a person is taxed. I am not
a tax
> expert, but I believe this would remove some of the lenders' recourse
> against somoene who has a foreclosure. The only other avenue of
recourse is
> if they chased a deficiency balance, which may or may not happen on a
> non-purchase money loan. (PMSI foreclosures have no recourse).
>
> Of course, I'm no tax expert, and I can be wrong, but that's how I
read all
> this.
>
> Hale
>
The post was migrated from Yahoo.