I have received a lot of questions lately on the status of the Mortgage Forgiveness Debt Relief Act of 2007 (HR 3648). For those not familiar with this act, this is a bill that would eliminate tax on forgiven debt. Here is a brief explanation (from an earlier post on this blog):
If a mortgage lender forgives debt as part of a short sale or foreclosure or what have you, they send the IRS a 1099 with the amount forgiven. At tax time you are obligated to report this forgiven mortgage debt as 1099 income.
Now going back to the status of the bill, it seems to have stalled in the Senate after passing the US House in early October. Based on the number of inquiries I have received there appear to be many people who are interested in seeing this bill passed. If you are one of those I suggest you contact your Senator to ask why they have not acted on this bill. Maybe things will move along after they realize how many people want this bill to pass.