Update on Federal Mortgage Forgiveness Debt Relief Act -Thursday, March 27, 2014
The Mortgage Forgiveness Debt Relief Act of 2007 (Pub L 110-142, 121 Stat 1803) allowed exclusion of income realized as a result of debt reduction on a taxpayer's principal residence resulting from a loan modification, workout, short sale, foreclosure, or deed in lieu of foreclosure. The Act was extended twice through 2013 but has now expired. However, the Senate Finance Committee may take up a so-called "extender" bill sometime this spring. Several such bills (which are still pending) have been introduced in both the House and the Senate since mid-2013.