Has your Coatesville short sale agent told you the good news about tax ramifications and your Coatesville short sale? If not, then we’d like to have the pleasure of doing so! A few months ago the Mortgage Forgiveness Debt Relief Act was extended to the end of the year. This means that qualifying homeowners that either lose their home to foreclosure or complete a Coatesville short sale are exempt from paying taxes on the forgiven amount.

You may be wondering what exactly this all means, so we’ll explain. For example, if you were to complete a Coatesville short sale on your home where the home was valued at $150,000 and you sold it for $100,000, the IRS typically sees that difference as taxable income. If the MFDRA weren’t in place, you would be required to pay taxes on that amount the following year, however since the MFDRA is in effect, qualifying homeowners are exempt from doing so.

There are a few stipulations to the MFDRA that Coatesville short sale agents think you should know before beginning the process. First, the home that is being sold must be your principal residence. Also, there is a cap on the forgiven amount that isn’t taxed. Lastly, your Coatesville short sale must be closed by December 31, 2013 to take advantage of this money-saving program.

To learn more about the Mortgage Forgiveness Debt Relief Act and to see if you qualify, get in touch with your Coatesville short sale agent as soon as possible; if you don’t qualify, ask your Coatesville short sale expert about other ways to avoid paying taxes on your short sale transaction. If you have yet to begin the process of selling your home on the Coatesville short sale market, we highly encourage you to get the ball rolling so that you can reap the benefits of this program before it’s too late!