Mortgage Forgiveness Debt Relief Act of 2007

Posted by Pat Koch

March 21, 2008

President Bush signed H.R. 3648, The Mortgage Forgiveness Act of 2007, into law, sparing homeowners the tax burden associated with canceled mortgage debt. Prior to this action, forgiven mortgage debt due to foreclosure, short sale, or deed in lieu of foreclosure, was considered taxable income. The new law, however, temporarily waives these taxes for debts forgiven (as high as 35%) from the beginning of 2007 to the end of 2009. The bill also extends the tax deduction for mortgage insurance premiums through 2014.

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648&tab=summary

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