St. Charles Financial Services, LLC

  • Home
  • Meet the Team
    • The Reps
    • The Staff
  • Company
    • About SCFSLLC
    • Our Sister Company
  • Let us be your Guide
    • Products & Services
    • Free Life Insurance Quotes
    • 10 Steps Process
  • Videos
  • Our Location
  • Contact Us
    • Tell a Friend!
  • FINRA
    • FINRA BROKER

Avoid Home Cancellation of Debt Income

July 21, 2014 by changescapeweb

When a taxpayer settles a debt for less than its full amount, the forgiven amount of the debt is taxable, unless the taxpayer qualifies for one of two currently available exclusions. With the downturn in the economy and the accompanying drop in home prices that occurred in recent years, many taxpayers are unable to keep up the mortgage payments on their home, and unable to sell their homes because they owe more than the market price. As a result, a large number of homeowners have let their homes go back to the lender.

Congress offered help for those in this situation by providing an exclusion from income of the forgiven acquisition debt from a taxpayer’s principal residence. If a taxpayer’s home is upside down, and they are considering letting it go back to the lender, they should be aware that unless Congress provides a last-minute extension, this Principal Residence Acquisition Debt Relief Exclusion will expire at the end of 2013. The only other exclusion available is the insolvent taxpayer exclusion, which limits the amount that can be excluded to the excess of the taxpayer’s total debts over the taxpayer’s total assets.

An individual not able to exclude the forgiven debt on their home using the insolvent taxpayer exclusion may wish to act before year’s end. The tax implications of forgiven debt are very complicated and not all the details are covered in this article. You are strongly urged to contact this office if you are contemplating letting your home go back to the bank.

Filed Under: Newsletters

More Information

  • Tax Center
  • Business Owners
  • Charitable Giving
  • Estate Planning
  • Life Insurance
  • Investments
  • Personal Finance
  • Retirement
  • Newsletters
  • General Tax Topics
  • Links
Facebook

Contact Us

by phone: 636-946-0001
by fax: 636-946-4782
by email

Location

ST. CHARLES FINANCIAL SERVICES, LLC
571 Jefferson St.
St. Charles, MO 63301

Follow Us

  • Facebook
  • Google+

Securities offered through The O.N. Equity Sales Company, Member FINRA/SIPC, One Financial Way, Cincinnati, Ohio 45242 (513) 794-6794. Investment Advisory Services offered through O.N. Investment Management Company. St. Charles Financial Services, LLC, is not a subsidiary or control affiliate of either The O.N. Equity Sales Company or O.N. Investment Management Company.

Representatives are licensed to offer insurance and annuities in MO, IL, MA, CA, KY, VA, AL, OK. This website is not intended for residents of other states.

Hours

Monday - Friday
8:30 a.m. - 4:30 p.m.

Copyright © 2021welcome to mt12 · St. Charles Financial Services, LLC · This website was Changescaped.

Copyright © 2021 · Agency Pro Theme on Genesis Framework · WordPress · Log in