For people that sold a home this past year, having all the necessary documents to avoid paying extra taxes is important. This is part of an email I got from a client this morning:
I'm about to get my taxes done, and I can't track down the closing documents from the sale of my house. Is there any chance you can email them to me? Thanks.
For this client, it is especially important as he closed his property as a Connecticut short sale this past year, and as if was closed under HAFA, he not only received a full waiver of liability, meaning he did not have to pay any additional money to his lender, but he also has a tax exemption for phantom income due to the extension of the Mortgage Debt Relief Act. This was passed earlier this year as part of 2016 Appropriations Bill (H.R. 2029).
When a short sale is completed, the difference between the amount owed on the mortgage and the number the bank accepted as payment of the note is called phantom income. This is considered a capital gain by the IRS, and as such would be subject to Federal Income Tax. This is not the case through 2016.
For a Connecticut home-owner that is underwater with their mortgage there are solutions that may make it easier for them to relieve their mortgage stress.
If you are a Connecticut home owner that is trying to avoid foreclosure, we may be able to help you. A simple call to make an appointment to review the problems and discuss the situation can allow you to be in the position of emailing me for closing documents next year as well.
It's Tax Time and For Some Connecticut People Those Documents are Golden
Do you know somebody who is behind on their mortgage and doesn't know what to do? I may be able to help them, especially if they are facing foreclosure!
Get Help with Short Sale in Connecticut
Whether looking to buy or sell, we service the Greater Waterbury towns of Beacon Falls, Bethany, Cheshire, Naugatuck, Middlebury, Southington, Thomaston, Waterbury, Watertown and Wolcott
Ed Silva RE/MAX Professionals, www.edwardsilva.com 203-206-0754