Archive for Mortgages

NO MORE STATE ON FORGIVEN DEBT

Distressed homeowners no longer have to pay California state income on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, generally aligns California’s treatment of debt relief income with federal law. For debt forgiven on a loan secured by a “qualified principal residence,” borrowers will now be exempt from both federal and state income consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

“Qualified principal residence” indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

The breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 returns may claim the exemption by filing a Form 540X amendment.

Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income . Also, taxpayers who are insolvent are exempt from debt relief income to the extent their current liabilities exceed current assets.

For more information about forgiveness consequences, go to California Franchise Board’s Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service’s Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of is available at www.leginfo.ca.gov.

Brought to you by the California Association Of Realtors

Leon C. Williams
Certified Foreclosure Specialist
Pre-Foreclosure Coach
leon@williamslandmark.com
Leonsblog
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Williams Landmark Real Estate

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Categories : Mortgages, Real Estate, debt
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Understanding Condominum and PUD Ownership

California’s builders, in an effort to combat the dual problem of an increasing population and a declining availability of prime land, are increasingly turning to common interest developments (CIDs) as a means to maximize land use and offer homebuyers convenient, affordable housing.

The two most common forms of common interest developments in California are Condominiums and Planned Developments, often referred to as PUDs. The essential characteristics shared by these two forms of ownership are:

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Categories : Mortgages, Real Estate
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War On Wealth Series – Wealth Preservation

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“Get Your House In Order And Save The World”

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