IRS Explains Mortgage Relief Provision
The IRS has released IR-2008-17 to alert taxpayers how to comply with the new mortgage cancellation tax relief provisions enacted at the end of last year.
Borrowers who had some portion of their mortgage debt forgiven in 2007 should receive a Form 1099C from the lender identifying the amount of forgiven debt.
The borrower/taxpayer will file a newly-created form to report to the IRS that the debt relief was for a qualified mortgage.
The new form, Form 982, and instructions are available at the IRS website, http://www.irs.gov/.
The mortgage relief provision applies to debt forgiven in 2007, no matter when the mortgage was entered into. The most frequent circumstances in which there is a debt forgiveness is on foreclosure, short sale or mortgage workout or reformation agreed to with the lender.
Source: TBR Newsletter
Wednesday, March 5, 2008
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