Some homeowners could get hit with a whopping tax bill if they accept help through Bank of America’s settlement

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Some homeowners could get hit with a whopping tax bill if they accept help through Bank of America’s settlement

Some homeowners could get hit with a whopping tax bill if they accept help through Bank of America’s settlement

The never-ending saga…


WAPO-

The $17 billion settlement that Bank of America reached with the Department of Justice on Thursday provides mortgage debt relief for some troubled homeowners. But those that accept the help could get hit with a hefty tax bill later.

As part of the settlement, the bank agreed to spend $7 billion on helping struggling homeowners and communities, including lowering the mortgage balances of certain borrowers who owe more than their homes are worth. The problem is that some of these “underwater” borrowers might have to pay taxes on the debt that’s forgiven.

In 2007, Congress adopted a law that spared homeowners from being taxed on the amount of the loan that was written off. But that tax break expired in December, and now that kind of relief can be counted as income by the IRS, an issue we wrote about in April.

[WASHINGTON POST]

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One Response to “Some homeowners could get hit with a whopping tax bill if they accept help through Bank of America’s settlement”

  1. GuyFawkes says:

    The Homeowner in America asks:
    “In how many different ways will this government fuck me?”

    The answer from the Feds:
    “We are still thinking of increasingly clever ways to fuck the American homeowner.”

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