HR 3648 Mortgage Forgiveness Debt Relief Act of 2007

By
Real Estate Agent with NEW CENTURY REAL ESTATE, inc

H.R. 3648 Mortgage Forgiveness Debt Relief Act of 2007

To amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on principal residences from gross income, and for other purposes.

12/20/2007--Public Law. (This measure has not been amended since it was passed by the Senate on December 14, 2007. The summary of that version is repeated here.)

Mortgage Forgiveness Debt Relief Act of 2007 - Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge, prior to January 1, 2010, of indebtedness incurred to acquire a principal residence. Limits to $2 million the excludable amount of such indebtedness. Reduces the basis of a principal residence by the amount of discharged indebtedness excluded from gross income. Disallows an exclusion for a discharge of indebtedness on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer. Sets forth rules for determining the allowable amount of the exclusion for taxpayers with nonqualifying indebtedness and taxpayers who are insolvent. Extends through 2010 the tax deduction for mortgage insurance premiums. Sets forth alternative tests for qualifying as a cooperative housing corporation for purposes of the tax deduction for payments to such corporations. Qualifies a corporation if: (1) 80% or more of the total square footage of the corporation's property is used or available for use by its tenant-stockholders for residential purposes, or (2) 90% of the corporation's expenditures are for the acquisition, construction, management, maintenance, or care of its property for the benefit of the tenant-stockholders. Allows members of a qualified volunteer emergency response organization (i.e., an organization that provides firefighting and emergency medical services) an exclusion from gross income for state and local tax benefits and for certain payments for services. Terminates such exclusion after 2010.

Allows certain full-time students who are single parents and their children to live in housing units eligible for the low-income housing tax credit provided that their children are not dependents of another individual (other than a parent of such children).

Allows a surviving spouse to exclude from gross income up to $500,000 of the gain from the sale or exchange of a principal residence owned jointly with a deceased spouse if the sale or exchange occurs within two years of the death of the spouse and other ownership and use requirements have been met. Increases the penalty for failure to file a partnership tax return and extends from five to 12 the number of months in which such penalty may be imposed. Limits disclosure of tax return information that includes individual taxpayer identify information.

Imposes an additional penalty on S corporations for failure to file required tax returns.

Amends the Tax Increase Prevention and Reconciliation Act of 2005 to increase the estimated tax payment due in the third quarter of 2012 for corporations with assets of at least $1 billion.

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Tags:
program 3648
short sale
primary residence
debt forgiveness
debt relief act

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Rainmaker
88,900
Paul Moye
Broker, GRI, SRES
Benchmark Realty
Great stuff but until they fix the bankruptcy laws this is just a good political form.
February 21, 2008 02:59 PM
Anonymous #2
Anonymous
Tony

This can't be true...

The IRS is going to let you forgo the amount owed on the home that was short sold.  What do you do, not report the 1099?  Or are there special forms that must be completed to take part in this 3648 program? 

March 06, 2009 04:58 PM
Rainer
11,161
Bill Carmichael
NEW CENTURY REAL ESTATE, inc

Yes it is true, an accountant told me that the forgiveness applies to an original purchase loan amount.  If there was a refinance amount forgiven then that might be considered as taxable income by the IRS.

If someone is considering a short sale then they need to talk with their accountant about the liabilities.

June 14, 2009 11:48 PM
Rainer
1,993
Carl Whirley

Program HR 3648 is a great program to look into regarding HR 3648 Mortgage Forgiveness Debt Relief Act. It is a fantastic program!

August 12, 2010 11:16 AM
Anonymous
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Rainer
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Bill Carmichael

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