TOPEKA – (January 7, 2013) – At the urging of 43 state attorneys general, Congress has extended the Mortgage Forgiveness Debt Relief Act of 2007, Kansas Attorney General Derek Schmidt announced today.
The one-year extension means homeowners who experience a debt reduction through mortgage principal forgiveness or a short sale are exempt from being taxed on the forgiven amount. Before the extension, the tax-relief provision was set to expire December 31, 2012.
In November, Schmidt joined 42 other state attorneys general in signing on to a letter to U.S. House and Senate leaders asking them to extend this distressed-homeowner tax relief. The relief has been extended until Jan. 1, 2014.
“This extension will help struggling homeowners take full advantage of the national mortgage settlement and other foreclosure relief programs,” Schmidt said. “Families who can least afford it will not be stuck with an unexpected tax bill during 2013.”