Realtors® Say Attorney General Holder is Right – No One Should Pay Taxes on Phantom Income
WASHINGTON (August 21, 2014) – The following is a statement by National Association of Realtors® President Steve Brown:
“U.S. Attorney General Eric Holder called on Congress today to do the right thing for financially distressed American families who lost homes to foreclosure or short sales this year, and Realtors® agree. After announcing the details of the U.S. Department of Justice’s settlement with Bank of America, which includes $7 billion in relief to consumers, Holder lamented that Congressional inaction to extend the Mortgage Forgiveness Debt Relief Act will mean that people meant to be helped by the settlement funds will instead be penalized on their income taxes.
“The tax relief expired on December 31 last year and unless Congress acts to extend it, every person who has already sold or plans to sell a home in a short sale in 2014, will pay taxes on nonexistent mortgage debt, which is money many don’t have.
“Realtors® are strong supporters of the bipartisan Mortgage Forgiveness Tax Relief Act, sponsored by Sens. Debbie Stabenow, D-Michigan, and Dean Heller, R-Nevada, and Reps. Tom Reed, R-New York, and Charlie Rangel, D-New York, to prevent underwater borrowers from paying taxes on any mortgage debt forgiven or cancelled by a lender after their home is sold for less money than is owed. Taxing forgiven mortgage debt as income is an unfair practice that also incentivizes defaults and foreclosures, which could torpedo the housing recovery.
“Congress should take immediate action to pass this legislation.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
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