Posted on: 01st Mar, 2008 08:51 pm
Shane, the law seems to imply that the forgiveness applies only to acquisition debt: 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. It goes on to say that the maximum amount of the excluded amount is $2 Milliion.
It does seem to indicate the law covers refinances if for "substantial" improvement of the house, which does not seem to cover the new Escalade and the trip, for a month to Jamaica. Is there in fact a "Use of Proceeds" test
Can you clarify?
Thanks!
Bill
It does seem to indicate the law covers refinances if for "substantial" improvement of the house, which does not seem to cover the new Escalade and the trip, for a month to Jamaica. Is there in fact a "Use of Proceeds" test
Can you clarify?
Thanks!
Bill
Welcome Bill.
As much as I know, the debt forgiveness is not meant for mortgages on second homes. It includes primary residences only. There are certain criteria for debt forgiveness under this act. But I haven't yet heard of any Use of proceeds test.
Thanks.
As much as I know, the debt forgiveness is not meant for mortgages on second homes. It includes primary residences only. There are certain criteria for debt forgiveness under this act. But I haven't yet heard of any Use of proceeds test.
Thanks.
I haven't heard of a use of proceeds test either. I even called the IRS this morning and asked and the representative there said there isn't a use of proceeds worksheet. On this I'd really consult with your CPA or tax adviser on what qualifies as substantial home improvement since they should be familiar with tax law.
A blog I found that gives a Cliff Notes overview of the law is at "http://www.homesalessandiego.com/blog/mortgage-debt-forgiveness-law/"
[Email address deactivated as per forum rules. Thanks.]
A blog I found that gives a Cliff Notes overview of the law is at "http://www.homesalessandiego.com/blog/mortgage-debt-forgiveness-law/"
[Email address deactivated as per forum rules. Thanks.]
