Short Sales
Mortgage Forgiveness Debt Relief Act
What is the Mortgage Forgiveness Debt Relief Act of 2007?
The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007 (see News Release IR-2008-17). Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.
What does that mean?
Usually, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. The Mortgage Forgiveness Debt Relief Act of 2007 allows you to exclude certain cancelled debt on your principal residence from income.
Does the Mortgage Forgiveness Debt Relief Act of 2007 apply to all forgiven or cancelled debts?
No, the Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes.
What about refinanced homes?
Debt used to refinance your home qualifies for this exclusion, but only up to the extent that the principal
balance of the old mortgage, immediately before the refinancing, would have qualified.
Does this provision apply for the 2007 tax year only?
It applies to qualified debt forgiven in 2007, 2008 or 2009.
If the forgiven debt is excluded from income, do I have to report it on my tax return?
Yes. The amount of debt forgiven must be reported on Form 982 and the Form 982 must be attached to your tax return.
Do I have to complete the entire Form 982?
Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Adjustment), is used for other purposes in addition to reporting the exclusion of forgiveness of qualified principal residence indebtedness. If you are using the form only to report the exclusion of forgiveness of qualified principal residence indebtedness as the result of foreclosure on your principal residence, you only need to complete lines 1e and 2. If you kept ownership of your home and modification of the terms of your mortgage resulted in the forgiveness of qualified principal residence indebtedness, complete lines 1e, 2, and 10b. Attach the Form 982 to your tax return.
Where can I get this form?
You can download the form at IRS.gov, or call 1-800-829-3676. If you call to order, please allow 7-10 days for delivery.
How do I know or find out how much was forgiven?
Your lender should send a Form 1099-C, Cancellation of Debt, by January 31, 2008. The amount of debt forgiven or cancelled will be shown in box 2. If this debt is all qualified principal residence indebtedness, the amount shown in box 2 will generally be the amount that you enter on lines 2 and 10b, if applicable, on Form 982.
Can I exclude debt forgiven on my second home, credit card or car loans?
Not under this provision. Only cancelled debt used to buy, build or improve your principal residence or refinance debt incurred for those purposes qualifies for this exclusion.
If part of the forgiven debt doesn’t qualify for exclusion from income under this provision, is it
possible that it may qualify for exclusion under a different provision?
Yes. The forgiven debt may qualify under the “insolvency” exclusion. Normally, a taxpayer is not required to include forgiven debts in income to the extent that the taxpayer is insolvent. A taxpayer is insolvent when his or her total liabilities exceed his or her total assets. The forgiven debt may also qualify for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding or if the debt is qualified farm indebtedness or qualified real property business indebtedness. If you believe you qualify for any of these exceptions, see the instructions for Form 982.
Latest Listings
$1,389,000
393 Philip Avenue, Staten Island, NY, 10312
$1,389,000
389 Philip Avenue, Staten Island, NY, 10312
$2,575,000
1201 East 10th Street, Brooklyn, New York, 11230
$1,099,000
53 Hanover Avenue, Staten Island, New York, 10309
$1,675,000
1797 East 14th Street, Brooklyn, New York, 11229
$1,425,000
723 Ionia Avenue, Staten Island, New York, 10312
$674,990
1 Canterbury Road, Plumsted, NJ, 08533
$399,000
47 Wild Turkey Way E, Manalapan, NJ, 07726
$450,000
112 Bash Road, Toms River, NJ, 08753
$949,961
1815 Melrose Boulevard 1805, Manalapan, NJ, 07726
$896,201
1814 Melrose Boulevard 1804, Manalapan, NJ, 07726
$911,521
1812 Melrose Boulevard 1802, Manalapan, NJ, 07726
$927,008
1414 Melrose Boulevard 1404, Manalapan, NJ, 07726
$881,621
1412 Melrose Boulevard 1402, Manalapan, NJ, 07726
$5,499,999
312 Spier Avenue, Allenhurst, NJ, 07711
$549,999
208 Cedar Street, Lakehurst, NJ, 08733
$899,990
201 Sunset Avenue 108, Asbury Park, NJ, 07712
$459,900
14 Elizabeth Street, Keyport, NJ, 07735
$955,000
274 Beachview Avenue, Manahawkin, NJ, 08050
$499,000
1324 Sixth Avenue, Toms River, NJ, 08757
$599,000
34 Shoal Road, Jackson, NJ, 08527
$270,000
101 Clerk Street, Jersey City, NJ, 07305
$415,000
54 Canterbury Lane, Toms River, NJ, 08757
$425,000
810 Hampden Street, Linden City, NJ, 07036
$550,000
18 Hampton Road, Howell, NJ, 07731
$265,000
270 Main Street 6, Keansburg, NJ, 07734
$509,900
21 Steeple Chase Court, Tinton Falls, NJ, 07724
$859,000
211 Schooner Circle, Neptune Township, NJ, 07753
$14,999,000
948 Lagoon Lane, Mantoloking, NJ, 08738
$375,000
11 S Point Court, Toms River, NJ, 08757
$575,000
22 Orchard Court, Howell, NJ, 07731
$1,499,000
38 Louise Drive, East Brunswick, NJ, 08816
$514,500
26 S Gateway, Toms River, NJ, 08753
$525,000
25 Meadow Avenue 64, Monmouth Beach, NJ, 07750
$330,000
177 Pulaski Boulevard, Toms River, NJ, 08757
$359,900
19 Blackthorn Place, Manchester, NJ, 08759
$360,000
62 Pintail Terrace, Bayville, NJ, 08721
$175,000
50 E Decatur Avenue, Pleasantville, NJ, 08232
$399,888
2415 1st Avenue, Toms River, NJ, 08753
$950,000
87 N Maple Avenue, Tuckerton, NJ, 08087
$828,900
26 Aristocrat Way, Jackson, NJ, 08527
$288,888
61E Buckingham Drive, Lakewood, NJ, 08701
$1,350,000
731 Marie Street, Toms River, NJ, 08753
$115,000
6 Avenue A, Hazlet, NJ, 07734
$695,000
1 Chelsea Court, Neptune Township, NJ, 07753
$670,990
7 Penny Lane, Neptune Township, NJ, 07753
$649,990
3 Penny Lane, Neptune Township, NJ, 07753
$788,000
4360 Old Bridge Matawan Road, Matawan, NJ, 07747
$869,990
27 Brewer Way 39, Plainsboro, NJ, 08536
$649,000
6 Muravski Court, South River, NJ, 08882
$295,000
34 Barker Avenue, Eatontown, NJ, 07724
$879,990
5 Flemmer Court 20, Plainsboro, NJ, 08536
$850,000
24 Bentley Road, Monroe, NJ, 08831
$470,000
109 Washington Street, Perth Amboy, NJ, 08861
$750,000
42 Ridge Road, Edison, NJ, 08817
$725,000
49 Sliker Road, Glen Gardner, NJ, 08826
$459,900
816-C Deal Road, Monroe, NJ, 08831
$399,900
340 Runyon Avenue, Middlesex, NJ, 08846
$1,350,000
25 Wicker Place, Morganville, NJ, 07751
$434,900
834 Amboy Avenue, Edison, NJ, 08837
$1,095,000
11 Adams Court, Plainsboro, NJ, 08536
$849,000
15 Titus Lane, Plainsboro, NJ, 08536
$625,000
128 Fontaine Court, Monroe, NJ, 08831
$715,000
94 Kline Boulevard, Colonia, NJ, 07067
$400,000
218 Winthrop Avenue, Moorestown, NJ, 08057
$245,000
166 Fulton Street, New Brunswick, NJ, 08901
$788,000
4360 Old Bridge Matawan Road, Old Bridge, NJ, 07747
$424,900
100 Neilly Court 100, Old Bridge, NJ, 08857
$1,499,000
38 Louise Drive, East Brunswick, NJ, 08850
$515,000
292 Morton Avenue, Rahway, NJ, 07065
$499,900
135 Chatham Avenue 135, Paterson, NJ, 07502
$1,099,000
53 Hanover Avenue, Staten Island, NY, 10309
$405,000
1250 Ocean Parkway 6r, Brooklyn, NY, 11230
$290,000
51 Vera Street B, Staten Island, NY, 10305
$749,999
988 Rensselaer Avenue, Staten Island, NY, 10309
$1,425,000
723 Ionia Avenue, Staten Island, NY, 10312
$896,913
1712 Melrose Boulevard 1702, Manalapan, NJ, 07726
$389,900
317 Bath Avenue 2, Long Branch, NJ, 07740
$399,000
206 Arlington Avenue, Union Beach, NJ, 07735
$345,000
6072 Cedar Court, Monmouth Junction, NJ, 08852
$385,000
14 Walnut Street 207, Toms River, NJ, 08753
$300,000
18 Mansfield Avenue, Manchester, NJ, 08759
$289,000
81 Puerto Vallarta Street, Toms River, NJ, 08757