This law exclude from income any debt forgiven or cancelled as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.
Usually, debt forgiven or cancelled by a lender must be included as income on your tax return and is taxable. This new law allows you to exclude certain cancelled debt on your principal residence from income.
Do you need to report it on your ax return? Yes. As a general rule, must taxable and non taxable items are reportable events, and this one is reportable.
What about debt on a second home, credit card or car loans? Yes, but not under this provision. This provision applies to your principal residence. The Provision can be used in 2007, 2008, and 2009.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment