Cancelled Home Mortgage Debt, Alabama's #1 Tax Service

If a lender cancels or forgives money you owe, you usually have to pay tax on that amount. But when it comes to your home, an important exception to this rule may apply in 2013. Here are several key facts from the IRS about the special exclusion for cancelled home mortgage debt:

• If the cancelled debt was a mortgage loan on your main home, you may be able to exclude the cancelled amount from your income. To qualify you must have used the loan to buy, build or substantially improve your main home. The loan must also be secured by your main home.

• If your lender cancelled part of your mortgage through a loan modification, or ‘workout,’ you may be able to exclude that amount from your income. You may also be able to exclude debt discharged as part of the Home Affordable Modification Program. Visit IRS.gov for more details about HAMP. The exclusion may also apply to the amount of debt cancelled in a foreclosure.

• The exclusion may apply to amounts cancelled on a refinanced mortgage. This applies only if you used proceeds from the refinancing to buy, build or greatly improve your main home. Proceeds used for other purposes don’t qualify. For example, a loan that you used to pay your credit card debt doesn’t qualify.

• Other types of cancelled debt do not qualify for this special exclusion. This includes debt cancelled on second homes, rental and business property, credit card debt or car loans.

• If your lender reduced or cancelled at least $600 of your mortgage debt, you should receive Form 1099-C, Cancellation of Debt, in January of the following year. This form shows the amount of cancelled debt and other information. Notify your lender if any information on the form is wrong.

• Report the excluded debt on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. File the completed form with your federal tax return.

• Use IRS e-file to file your tax return. E-file is the easiest way to file because the software will do the hard work for you. You can use IRS Free File to prepare and e-file your tax return with either free, brand-name software or online fillable forms – all for free. Otherwise, you may file electronically with commercial software, or through a paid preparer.



For more info contact
MOORE'S SERVICES, LLC
2160 Green Springs Hwy Suite E. 
Birmingham, AL 35205

Phone: 205-324-8753
www.mooresservicesonline.com

Income Tax Preparation, Preparation Tax,

Tax Preparation of Income Tax, Income Tax, Tax Service, Tax Office, Office Tax, Birmingham, Alabama, AL, AL. Com, YP.com, Yelp.com, Google, Google+, Yahoo, Bing, Alabama Income Tax Service, Tax Preparation in Birmingham, AL, Tax Preparation in Alabama, Income Tax Preparation in Birmingham, AL, Income Tax Preparation office in Birmingham, AL, Tax Preparation office in Birmingham, AL, Tax Preparation, H&R Block, Jackson Hewitt, Liberty Tax, Alabama Football, National Championships, Auburn Football, Iron Bowl, #1, #4, SEC, SEC Champion, SEC CHAMPIONSHIP, BSC Championship, BAC National Championship, Filing Online Is Easy, Filing online, Tax Professionals, Professionals Tax, Tax Refund, Tax,
guarantee, Tax Prep, refund, money, open all year long,
open year long, open year round, Tax deductions and credits, Income and expense, Pay Nothing Out-of-Pocket, Refund Anticipation Check to pay your fees with your refund. Account, Accountant, Accounting, Notary, Notary Public, Notary Public Service.