It looks like congress has decided to let the mortgage deficiency tax benefit expire December 31, 2013. I believe there's a lot of strategic short sales happening out there.
Unless congress chooses to reenact this tax forgiveness, I expect that many short sales being offered now will get pulled from the market and considerably less will surface in the month's to come.
Unfortunately, the greatest pain will be felt by the poor and naive. This segment of the market has taken such a beating and this is a kick in the crotch while they are on the ground. This expiration will only benefit the wealthy and not increase tax revenue.
The only way congress can capitalize on this action would be to enact a law that states that the buyer that is capitalizing on the seller loss, be responsible for the deficiency in taxes of the seller. This way, the seller is out of the obligation and the buyer still got a great deal!
As real estate professionals, we need to get the word out to educate everyone considering short sales or any other method used to get out of debt. Advise them to seek a tax consultant, before signing any contracts.
For some, I know there are no other options. But for those taking advantage of those by coaching this activity, shame on you! Be a public servant and have mercy on these less fortunate's. Offer every option available to minimize the deficiency.
Thank you!
Curtis Rudolph Realtor®
813.240.6054 cell/text
Realty Direct Tampa
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