If you’re like the average American, you are either unaware of what the Mortgage Forgiveness Debt Relief Act of 2007 is, and how it might affect your ever-day life as a taxpayer. All of the major points of mortgage forgiveness are listed below.
What is Mortgage Forgiveness?
Mortgage forgiveness is a modification of the International Revenue Code.
This amendment is valid if your indebtedness occurs before January 1st, 2010 and only if you own one principal home.
It applies to a debt limit of 2 million dollars.
It forbids exclusion for a discharge of debt from anyone not directly related to the financial position of the individual in question.
It is a set of strict rules that were created in the goal of determining the most needing individuals, and excluding those who do not fully require the aid of mortgage forgiveness.
Increases tax deductions for mortgage insurance until the year 2010.
It has a set of pre-determined specifications to correctly identify cooperative housing corporations and applies tax deductions accordingly.
These specifications are that the square footage of a given corporation must be occupied at 80% by tenants who are living permanently or temporarily in the establishment. Also, 90% of the costs of these corporations must be due to the construction, management or maintenance of the institution.
This act provides tax benefits for residents who are involved in any type of emergency volunteer work. Examples of these volunteer jobs are volunteer firemen and EMS or emergency medical service teams.
It also provides housing units with low tax rates to full-time students who are also single parents. To be a candidate for these tax reductions, your child cannot be receiving financial support from another parent in any way.
It allows a widowed spouse to gain a tax-free amount of up to 500,000 dollars from the sale of a home that was equally owned with a deceased partner.
It increases the severity and length of punishment for failure to file tax returns.
This act limits the amount of personal information that is available on any taxpayer making mortgage payments. This dramatically stunts identity theft.
Finally, it increases tax payments for corporations with a net worth over 1 billion dollars.
All in all, the Mortgage Forgiveness Debt Relief Act of 2007 covers many bases to ensure that more people are free of debt in America. This innovative program is helpful in re-distributing tax money so that the more financially-needing households receive valuable help from the government.