The Mortgage Debt Relief Act of 2007 provided for no income tax to a borrower on any deficiency after a foreclosure or a short sale of a mortgage used to purchase a home, or make improvements to the home. The Act expired December 31, 2013. They used to call these taxable events phantom income. Here’s how it works. I am a homeowner and my bank writes down the mortgage $150,000.00 because I lost me job. Well, pre-2007 the IRS would hit you for 33% of the write down in a tax. Last week Congress passed legislation to extend the Act until December 31, 2014. In other words, any deficiency as discussed above will not be taxable income to a borrower if the foreclosure or short sale occurred in 2014.

We have a good track record of helping property owners get relief. At least up through 2014, there is no tax on many of these transactions. Call Bill Miller at 602.319.6899 if you would like to discuss this or other business law or real estate related matters. Our office is located at 8170 N. 86th Place, Suite 208 Scottsdale, Arizona 85258.

We also handle, Breach of contract, Non-compete agreements, Non-disclosure agreements, Employee theft and embezzlement, Insurance purchases and enforcement of policy coverage, Negotiation and/or enforcement of commercial leases, Negligence and gross negligence resulting in losses, Intentional acts causing a company to suffer damages, Tortious interference with contractual relationships, Unjust enrichment, Real Estate fraud, Consumer fraud, Conversion/Theft, Intentional and/or negligent misrepresentation, Business torts and Real estate title and escrow.

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