IR-2008-17, Feb. 12, 2008

WASHINGTON — Homeowners whose mortgage debt was partly or entirely forgiven during 2007 may be able to claim special tax relief by filling out newly-revised Form 982 and attaching it to their 2007 federal income tax return, according to the Internal Revenue Service.

Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec. 20, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was less than $2 million. The limit is $1 million for a married person filing a separate return. Details are on Form 982 and its instructions, available now on this Web site.

“The new law contains important provisions for struggling homeowners,” said Acting IRS Commissioner Linda Stiff. “We urge people with mortgage problems to take full advantage of the valuable tax relief available.”

The late-December enactment means that reporting procedures for this law change were not incorporated into tax-preparation software or IRS forms. For that reason, people using tax software should check with their provider for updates that include the revised Form 982. Similarly, the IRS is now updating its systems and expects to begin accepting electronically-filed returns that include Form 982 by March 3. The paper Form 982 is now being accepted, but the IRS reminds affected taxpayers to consider filing electronically, which greatly reduces errors and speeds refunds.

The new law applies to debt forgiven in 2007, 2008 or 2009. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief. In most cases, eligible homeowners only need to fill out a few lines on Form 982 (specifically, lines 1e, 2 and 10b).

The debt must have been used to buy, build or substantially improve the taxpayer's principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing. 

Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other kinds of tax relief, based on insolvency, for example, may be available. See Form 982 for details.

Borrowers whose debt is reduced or eliminated receive a year-end statement (Form 1099-C) from their lender. For debt cancelled in 2007, the lender was required to provide this form to the borrower by Jan. 31, 2008. By law, this form must show the amount of debt forgiven and the fair market value of any property given up through foreclosure.

The IRS urges borrowers to check the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. Borrowers should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for their home ( Box 7).

Source: www.irs.gov

FAQ on Mortgage Forgiveness Debt Relief Act

CHINO HILLS - The four main reasons that people migrate to Chino Hills are the beauty of Chino Hills, the safety in Chino Hills, the good school district in Chino Hills, and the fast value growth of Chino Hills. According to 2005 listing from CNN/Money and Money magazine for the top 100 places to live, Chino Hills was ranked 68th in America and took 7th place in North and South California.

Chino Hills: On the 2nd week of May, there are 9 homes sold, 8 homes in pending and 3 back up listing, a total of 11 homes in transaction. The whole unsold inventory increased very slightly. The sales rate for April has increased to 18%. The doubling of sales rate is a positive indicator for the coming months.
(update 05-13-2008)

CHINO - The City of Chino is centrally located in the western portion of the Inland Empire, in the lush valley below the San Gabriel Valley Mountains. Commercial and industrial growth has been a significant success in Chino, due in large part to the City’s development friendly philosophy. The community of Chino is still growing, there are still new homes being built in "The Preserve."

Chino: On the 2nd week of May, there are 8 homes sold, 17 homes in pending and 3 back up listing, a total 20 homes in transaction.The whole unsold inventory has decreased a bit from the previous months. The april sales rate has decreased from last month to 5.8%. Within the last year, Chino’s sales rate has been low compared to its neighboring city of (Eastvale) Corona, who both has newer developments for cheaper prices and an abundance of REO properties.
(update 05-13-2008)

EASTVALE (CORONA) - Located in the North Western corner of Riverside County; CA, Eastvale is a rapidly growing community with well over a dozen developers building new neighborhoods. It is a place where families can enjoy quiet residential streets, easy access to freeways and shopping, new public school facilities and high quality housing. Residents have quick access to several major roadways, including Interstate 15 and State Routes 71, 60 and 91. Eastvale has quickly become a neighborhood of choice.

Corona (Eastvale): On the 2nd week of May, there are 11 homes sold, 19 homes in pending and 8 back up listing, a total of 27 homes in transaction. The unsold inventory has continue to deceased a bit from the previous month. The April sales rate has increased to 26.4%. The April sales rate’s increase may be due to the overwhelming amounts of foreclosure in the area, making it more attractive for buyers to buy in this area
(update 05-13-2008)