Mortgage Forgiveness Debt Relief Act of 2007

In late December 2007 President George Bush signed the Mortgage Forgiveness Debt Relief Act of 2007 into law.

This new legislation is to help homeowners avoid foreclosure by allowing them to refinance without any tax consequences or have their lender agree to a short sale on their home. The Mortgage Forgiveness Relief Act allows for the homeowner to reduce the basis in their house (as reported by the mortgage company on a 1099C) and not reporting this forgiven debt as a capital gain or taxable income, therefore not creating any additional taxes due for the homeowner.

To get a summary of this bill go to http://www.govtrack.us/congress/bill.xpd?bill=h110-3648 .