If you are seriously considering doing a short sale on your home but haven’t completely made up your mind yet about what you’re going to do, now might be the best time to take action and consult with a Denver short sale specialist about your situation. The Mortgage Forgiveness Debt Relief Act is going to expire at the end of the year, so if you want to avoid paying taxes on forgiven debt and save yourself thousands of dollars, now is the time to get the ball rolling and start working with a short sale specialist.

The Mortgage Forgiveness Debt Relief Act makes homeowners that have forgiven debt from either a short sale or a foreclosure exempt from paying taxes on that forgiven amount. When you lose your home to foreclosure or do a short sale, the amount that is forgiven on your mortgage is seen as income by the IRS. You will receive a 1099 from your lender with the forgiven amount list as taxable income. Typically, if the MFDRA wasn’t in effect, you would have to pay taxes on this amount; however, since the MFDRA doesn’t expire until the end of the year, you can potentially save yourself tons of money by ensuring your short sale transaction is closed by December 31, 2012. Because the short sale process can take some time, usually up to six months, we want to encourage you to begin the process as soon as possible. Issues can often come up when short selling your home or there can be delays with the lender, investor or buyer.

If you are at all considering a short sale, it’s best to begin the process immediately and contact a short sale specialist today. Don’t lose out on taking advantage of this money-saving act because you were too hesitant or unsure what to do. There are resources out there to help you determine if it’s best for you to short sale your home so, at the very least, reach out to a Denver short sale specialist to see if a short sale is best for you and to find out the terms and guidelines of qualifying for the Mortgage Forgiveness Debt Relief Act.