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The new section on IRS.gov includes a worksheet to help homeowners determine whether they are eligible for any foreclosure-related tax relief.
For those who find they owe additional tax, it includes a form for requesting a payment agreement with the IRS.
The tax agency noted that if the debt wiped out through foreclosure exceeds the value of the property, the difference is normally taxable income. But a special rule also allows insolvent borrowers to offset that income to the extent their liabilities exceed their assets.
President Bush has proposed tax relief as part of efforts to deal with the sharp rise in mortgage defaults. He said he would support legislation pending in Congress that would temporarily change tax law to let homeowners avoid paying taxes on forgiven debt in loans that are being restructured by financial institutions.
(See IRS
article.)
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On the Net:
Internal Revenue Service: http://www.irs.gov/
[Associated Press]
Copyright 2007 The Associated Press. All rights reserved. This
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