Some very good news for anyone who went through a short sale during the year 2015 and might have to during 2016. As part of the Tax Extenders bill that just passed both the House and Senate the mortgage debt that was forgiven during the short sale is no longer taxable to the homeowner.
This is an extension of the Mortgage Forgiveness Debt Relief Act of 2007 which forgave this tax through 2013. In 2014 also at the very last minute of the year this act was extended and now for 2015 at the very last minute it is extended. The President still needs to sign this but said he will.
This is very good news…this is a link to the page on the IRS website and look for it to be updated shortly with the new extension information.