The debt forgiveness tax exemption is due to expire 12/31/12. Can you imagine the amount of folks in this country that would most likely put a stop to the short sales that are in process or will happen in the future?
Right now the loss associated with the sale of the property is considered income, but has been tax exempt for the last five years.
The Congress and Senate will need to extend this law, in order for the real estate sales to continue, so that homeowners can get out of the underwater properties.
If the law is not extended, we will have the beginnings of another real estate downturn, which no one wants.
By: Carolyn Said