It’s January 2 and our “Fiscal Cliff” crisis has been averted. I’m not going to pretend I know everything there is about the fiscal cliff (who names this stuff anyway?!), but I am going to highlight what it means to the world of Real Estate. (Disclaimer: We are not licensed CPA’s and are merely passing along information. Always consult your CPA or tax professional with questions regarding any of this information.) Mortgage Forgiveness Debt Relief is extended through 2013 This is huge. Had this not been extended, it would essentially mean that any debt forgiven through mortgage modification or short sale would be taxed as income. (Ex: If Mr. Smith short sold his home and the bank wrote off a loss of $150,000.00, Mr. Smith would be taxed on that $150,000.00 as income.) This would have forced more homeowners into making a decision that involved foreclosure or bankruptcy. Mortgage Insurance Premium Deductions Homeowners with Adjusted Gross Income below $110,000 can continue to write off their PMI premiums. Check with your CPA to see if there is a sliding scale above $110,000. Tax Credits for Energy-Efficient Home Improvements and Energy-Efficient New Construction For improvements made in 2012-2013 such has new windows, high-efficiency HVAC units, upgraded insulation, and other energy-efficient improvements may see a $200-$500 tax credit. Builders can claim a $2,000 tax credit for new homes that meet certain requirements and standards. Also extended are credits for domestically-manufactured high-efficiency appliances. As mentioned before, please consult your CPA for further details and accuracy. Thankfully these items were extended, most importantly the Mortgage Forgiveness Debt Relief Act. For help taking advantage of selling a distressed property this year, give us a call at 480-295-4550 to strategize. We have partnered with a Real Estate Attorney, CPA, and a debt restructuring specialist to assist our clients through the short sale or traditional sale process.
About the author
Gene Montemore is a Scottsdale and Metro Phoenix real estate veteran since 2002. He focuses on residential and land, and has closed over 800 properties and received numerous awards. Gene dives deep into the tech and marketing aspect of selling…