If you’re considering doing a short sale on your Minneapolis duplex, waiting too much longer could increase your taxes.
Under the Morgage Debt Relief Act of 2007, debt forgiven that was incurred to buy, build or substantially improve an owner-occupied duplex may be excluded from taxable income if the duplex owner meets specific criteria.
This exclusion expries December 31, 2012, unless the bill gets extended. With improving economic news, this may not be as likely as it once was.
In order to meet the December 31 deadline, a duplex seller must have received, accepted, and negotiated an offer with a buyer that the lender or lenders agreed to.
As this process and take 4-6 months, duplex sellers will need to have their properties listed for sale no later than the middle of May.