The deadline for filing taxes for 2020 is May 17, 2021. And one thing you should note is that this year, mortgage forgiveness on your property is being treated differently than usual and that could benefit you.
Normally, debt forgiven on your property is considered income and therefore taxable. However, due to the unusual circumstances during the COVID-19 Pandemic, qualified principal residence indebtedness is excluded as income by the Internal Revenue Service through 2020. This applies to some taxpayers who have had debt forgiven due to foreclosure, loan modification, short sale or deed in lieu of foreclosure.
This is an important fact to note. Mortgage forgiveness has the potential to make a significant change to how much taxable income you need to declare. If you were involved in discharged debt on your principal residence, you should consult with a tax advisor to determine how this affects your taxes.
If you need assistance with this, contact Sound Investments, Inc. by clicking here or by calling 510.377.8853.
Unfortunately, the deadline to file for the 2020 Recovery Rebate Credit was May 17, 2024. If you haven’t filed for it already, you will not be able to. If you have any other tax questions related to how mortgage is handled, Sound Investments, inc. can help you since we have a tax advisor on staff who can answer your questions.