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If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable. The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
This provision applies to debt forgiven in calendar years 2007
through 2012.
Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.
Housing recovery could take a decade, economists warn
By Renae Merle
Washington Post Staff Writer
Wednesday, January 27, 2010
Even as the housing market shows signs of improvement, including in new data released Tuesday, economists warn that it could take up to a decade for many homeowners to regain equity in their homes, while some people in the hardest-hit regions of the country may not see a recovery during their lifetime.
Existing-home sales take a big fall in December
By Renae Merle
Washington Post Staff Writer
Tuesday, January 26, 2010
Sales of previously owned homes took their biggest tumble in at least 40 years last month as the impact of a buying spree spurred by a tax credit for first-time buyers waned, according to industry data released Monday.
GM to build electric motors in Maryland
By Peter Whoriskey
Washington Post Staff Writer
Tuesday, January 26, 2010
Betting that hybrid and electric vehicles will play a growing role on American highways, General Motors is expected to announce Tuesday a $246 million investment to add production of electric motors at its White Marsh, Md., manufacturing plant.
Stakes are high as government plans exit from mortgage markets
By David Cho, Neil Irwin and Dina ElBoghdady
Washington Post Staff Writers
Monday, January 25, 2010
For more than a year, the government pulled out the stops to revive home buying by driving down mortgage rates.
Now, whether the housing market is ready or not, the government is pulling out.
The wind-down of federal support for mortgage rates, set to end in two months, is a momentous test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own.
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