The end of 2012 was dominated by talk of two different types of doomsday scenarios. First, there were the fears of a Mayan apocalypse, which was then followed by the more realistic fear that the United States was about to go over a financial fiscal cliff.
Fortunately, the people who were convinced that the Mayans had predicted the end of the world were wrong, and Congress and the President were able to avert most of the impact of the fiscal cliff — at least for now. However, there were a few changes made during the tense fiscal cliff negotiations regarding real estate that you might need to be aware of.
For instance, a Jan. 2013 Washington Post article reported that the new compromise bill created by the fiscal cliff negotiations renewed the Mortgage Forgiveness Debt Relief Act that would have otherwise ended at the close of 2012.
If this act had not been re-approved, homeowners who were trying to short sell properties would have had to pay taxes on the full amount that had been forgiven to them by their lenders. If, for instance, a home was being sold for $100,000 less than its mortgage, the tax consequences to the short seller would have been on the full $100,000. Because many short sellers are typically already experiencing financial difficulties, most would probably not have been able to pay these taxes. Some of these homeowners could have then been forced into declaring bankruptcy or having their property taken over by foreclosure.
This is just one of a number of changes that have come into play with the new compromise bill. Because these changes are so new for 2013, it is a good idea to consult with an experienced attorney South Florida expert if you are planning to sell your house, such as a lawyer from the offices of Kristin Coomber, P.A. Lead attorney South Florida expert, Coomber and her team are known throughout the area for being experts in real estate legal services.