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Upside Down on Your Mortgage? Consider a SHORT SALE!
Five years ago Congress passed the Mortgage Forgiveness Debt Relief Act of 2007.
This allowed taxpayers to exclude from their taxable income, the amount of debt that was forgiven or canceled by their lender.
Under federal tax code, forgiven debt (read short sale) was considered by the IRS as income.
As an example:
If you owed $250,000 and your lender forgave $50,000 of that debt in a $200,000 short sale or loan re-finance, that $50,000 was considered income.
If your combined federal and state marginal tax rate was 36%, you would owe $18,000 in taxes.
YIKES!
For the past 5 years, sellers were free of this obligation…
…..but this tax break is due to expire on December 31, 2012, and there is no indication that lawmakers are considering an extension.
NOW is the time to talk to us about the possibility of a SHORT SALE!
Call us today! We have the skills, training & strategies to help you with your Real Estate needs!
Randy Oetken
208-660-0518
Oetken@RealEstate-Browser.com
Related articles
- Short Sale Tax Relief Set to Expire; Realtors and Sellers Unaware (geoffreyrealtor.wordpress.com)
- How To Report Debt Canceled on Form 1099-C (turbotax.intuit.com)
- What Short Sale Homeowners Should Know (bringyouhome.wordpress.com)
What do you think: Require 20% Down?
Friends,
We pass this along to you in an effort to keep you informed. This article was forwarded to us this week from various sources, especially the Realtor Action Center.
We’d love to hear from you. Comments are open for your opinion on the proposed 20% Down Payment requirement.
Proposed QRM Regulations Could Stifle Housing Market
The National Association of REALTORS is encouraging its members to contact Congress about the proposed regulations governing Qualified Residential Mortgages (QRM). If approved, all homebuyers would be required to pay a 20% down payment when buying a home. This would have a detrimental impact on the real estate industry and the overall economy. Economic recovery depends largely on a housing market recovery; therefore implementing a new rule requiring a 20% or higher down-payment would stop the housing recovery in its tracks.
NAR asks that you consider contacting Congress today and ask them to please make it clear to the regulators that this was not their legislative intent and to instead implement a more reasonable Qualified Residential Mortgage (QRM) that will keep credit-worthy buyers in the market and able to acquire a loan.
It’s very easy to do; just go to the REALTOR Action Center and the website does everything else for you.
1099 Rental Reporting: What does this have to do with Health Care?
Rental Property Owners have been handed another huge burden for reporting income and expenses in 2011 & 2012.
The Small Business Jobs Act of 2010 and Patient Protection and Affordable Care Act, PL 111-148, signed into law in 2010, both beef up 1099 reporting requirements and pentalties for rental property owners.
Between the two acts, Rental Property owners will be responsible for sending 1099’s to perhaps hundreds of service and retail vendors over the next two years. Corporations are not exempt.
IRS Forms 1099 must be issued by every person in business paying $600 or more during the year for services. If you pay a plumber to unplug the sink in your restaurant 6 times during the year at $100 a visit, you’ve got to issue a form to your plumber and the IRS. If your plumber is incorporated, you don’t have to issue the form. Well, until now. http://blogs.forbes.com/robertwood/2010/11/23/got-irs-forms-1099-more-soon/
Chris Neefus of CNSNews.com explains it this way:
The Patient Protection and Affordable Care Act, President Obama’s health care law, requires that small businesses file a Form 1099-MISC with the IRS for any goods they purchase from an outside vendor valued at over $600.
But the new bill, the Small Business Jobs and Credit Act (H.R. 5297), extends the mandate to private individuals who own property from which they receive rental income. Those people would also now have to fill out paperwork reporting any expenditure they make on that property valued over $600 for the year.
“There’s 10 million people who don’t know that they’re now suddenly going to be required to do this,” Ellis said. “They don’t have to issue them until January 2012 because it’s a 2011 requirement, but they’ve got to start tracking in January (2011). So I hope their internal accounting is good.”
Writing for ATR, Ellis said, “So imagine that you’re renting out your starter condo. You pay a property manager, a plumber, a repairman, a locksmith, a condo association, etc. Imagine having to get a taxpayer identification number, order 1099-MISCs from the IRS, fill them out by hand, keep a copy for yourself, send a copy to each payee (from whom you had to get a tax ID number and other information), and then finally take your legitimate rental deduction. Then the IRS finds some hiccup somewhere, and you get audited — all to placate an insane Congress.”http://www.cnsnews.com/news/article/75911
Quick figuring…At .44 postage per sheet, a ream of paper (which might be required for all those 1099’s) could cost you big. Do the math:
500 Sheets per ream X .44 = $220
How many 1099’s will you be sending?
Not that you could actually PRINT your own 1099’s anyway. You’ll have to order those from the IRS. See page 1 of the IRS 1099msc form, which has been generously made available for downloading. Caveat? You can’t USE the downloadable pdf! It’s not scan-able. Sorry. Enticing though it may be, if you send the downloadable PDF, you may be fined $50!)
And…what in the world does this have to do with HEALTH CARE???
This is our government’s version of assisting Small Business??
Related Articles
- New Rules: You and the Irs This January (ppjg.wordpress.com)
- Let There Be Forms 1099 (blogs.forbes.com)
- IRS Form 1099 Wars (blogs.forbes.com)
- Got IRS Forms 1099? More Soon (blogs.forbes.com)
