Real Estate Information

Now is a surprisingly good time to consider home improvements.  One reason: Making upgrades has become less expensive.  The weak economy means many contractors are cutting their prices.  Costs have also fallen for many construction materials.  In addition, retailers are offering sales on household goods such as appliances, furniture and lighting.

The Washington Post

If you lost your home to foreclosure or a short sale (the lender agreeing to accept sales proceeds that are short of owed mortgage), That unpaid debt is technically considered income to you.  For the tax years of 2007 through 2012, the government is waiving any tax liability on that phantom income.  The lender will send you and the IRS a copy of Form 1099-C, “Cancellation of Debt” reporting that forgiven debt as income.  To make sure you are not taxed on the amount, you will need to file Form 982, “Reduction of Tax Attributes Due to Discharge of Indebtedness.” Download FREE forms from www.IRS.gov.  If you’ve lost a home to foreclosure, be sure the bank and IRS have your current address (notify the IRS by mailing in Form 8822) so you receive important notices promptly.  Forgiven debt on vacation homes and rental properties is still taxable as if were income.