Prospects for mortgage forgiveness debt relief promising

There are signs that Congress may pass extensions of popular housing-related tax benefits sometime this spring, including those allowing for mortgage debt forgiveness, write-offs for energy-saving improvements and mortgage insurance premiums, writes syndicated columnist Ken Harney in an article that appeared in the Daily Herald.

The federal Mortgage Forgiveness Debt Relief Act of 2007, a law that allowed homeowners to avoid liability for federal income tax on debt forgiven in a short sale or through a principal reduction, expired on Dec. 31, 2013, despite strong bipartisan support.

At the end of January, the National Association of Realtors noted that the U.S. House of Representatives did not want to extend temporary tax provisions without comprehensive tax reform, which meant any extensions would be unlikely to happen before the November elections.

But if, as expected, the Senate Finance Committee approves and the full Senate passes some form of extender package — including two or three housing provisions — election-year pressure on House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, to pass some version “will be intense, despite his preference for comprehensive tax reform, which has no chance of passage in 2014,” Harney wrote.

Source: dailyherald.com

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