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Washington Post: Underwater homeowners could face extra tax burden in 2014

by Michael H. Wasserman, Attorney at Law

The Mortgage Forgiveness Debt Relief Act expires Tuesday at midnight. Sadly and perhaps all to predictably, Congress has three bills pending that would extend tax relief for underwater home owners, but has not acted to move any of them forward for passage.

As new years approaches, several buyer-clients and I find ourselves standing on the sidelines watching several short sales that were "all but" approved but have ground to a full stop over the last several weeks, for no apparent reason.

Waiting to see what happens next, if / when the Sellers lenders approve any or all of these deals next year. 

  • Will Seller's attorneys advise their clients of the tax liabilities their clients will now face?
  • Will they kill deals outright
  • Delay closings until (?) Congress acts? (Will Congress act to extend the tax relief law?), or,
  • Will they sell their clients down the (tax liability) river to close contracts (and get paid)?

More on this mess, reported here.

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