AG Gansler Urges Congress to Extend Tax Relief for Struggling Homeowners
Key tax measure expires at year's end, undercutting the
relief and assistance provided by mortgage settlements
Baltimore, MD (December 19, 2013) - Attorney General Douglas F. Gansler, joined by 42 state and territorial attorneys general, today urged Congress to extend the Mortgage Forgiveness Tax Relief Act through at least 2014, in order to continue helping financially strapped homeowners. The Act expires on December 31 at a time when the housing market, while still fragile, has shown signs of gradual improvement over the past year.
"Thousands of Maryland families who have been able to get mortgage debt relief should not face a tax bill they cannot afford," said Attorney General Gansler. "Letting this tax relief expire would undercut the purpose of the mortgage settlements. It's vital to helping families stay in their homes and to continue the housing market recovery that supports and stabilizes so many Maryland communities."
Under the federal Mortgage Debt Relief Act, in effect since 2007, mortgage debt that is forgiven after a foreclosure or short sale or through a loan modification provided to a homeowner in financial hardship may be excluded from a taxpayer's calculation of taxable income. This exclusion only applies to mortgage debt forgiven on primary residences, not second homes.
An extension for 2014 is included in the Mortgage Forgiveness Tax Relief Act (S. 1187 and H.R. 2788), both of which are in committee. It is uncertain when these critical bills may be considered. The current Ryan-Murray budget proposal does not include the exemption provision.
Last year, Attorney General Gansler joined 41 other attorneys general in successfully persuading Congress to extend these benefits into 2013.
Through the National Mortgage Settlement signed by Attorney General Gansler in February 2012, more than 17,000 Maryland families have received $1.37 billion in consumer relief as of June 31, 2013.
To view the letter to congressional leaders visit: