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Mortgage relief received in 2012 may not be taxable

Saint Louis Realtor, Dennis Normanst-louis-real-estate-realtor-dennis-normanMissourians have received more than $112 million of mortgage relief as a result of the National Mortgage Settlement reached a year ago with the nations largest lenders, according to Missouri Attorney General Chris Koster.  Koster, along with Attorney General’s from other states, sent a letter to Congress last November urging them to extend a measure that was due to expire at the end of 2012 that would provide tax relief for some people receiving mortgage relief in the form of principal reduction and short sales.    January 1, 2013, Congress passed the extension as part of the American Taxpayer Relief Act of 2012.

“Many Missourians were harmed by the recession and the housing crisis and found themselves upside-down in their mortgages or facing foreclosure,” Koster said.  “The National Mortgage Settlement aims to help struggling homeowners by arranging lower payments and providing other assistance. Those who rely on the Settlement to stay afloat can scarcely afford to pay additional taxes on the relief they receive. I am pleased that Congress heeded our concerns and gave the homeowners the tax exemption they needed.”

If you live in Missouri and have a question about the National Mortgage Settlement, you can call the Missouri Attorney General’s Mortgage Hotline at 855-870-7676. Individuals who have questions about their own tax situation are encouraged to consult their attorney or other tax professional.

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