Short Sale?

Is your house underwater? If you are considering a short-sale, deed in lieu of, or other evasive maneuvers on your primary home, please be aware that on 12/31/16 a “really” nice tax exception vanishes. As the current tax law stands, a primary residence’s “cancelation of debt” (when the bank writes off your mortgage) is tax free. That means, a $100K mortgage on 12/31/2016 = $0 taxes, on 1/2/2017 = taxes (15% tax bracket = $15,000!) Maybe they will extend the law, but then again maybe not. If you are considering, please know that as long as you and your lender sign an agreement prior to 1/1/2017 you get to use the 2016 debt tax laws, regardless of when the close actually occurs.

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