Tax Article - Mortgage Forgiveness Debt Relief Act of 2007

President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007 last week. This law change excludes from taxation discharges of up to $2 million of indebtedness that is secured by a principal residence and is incurred in the acquisition, construction, or substantial improvement of the principal residence. It will be available for three years from January 1, 2007 through December 31, 2009. This act also includes an expanded time-period for a surviving spouse to use the higher home sale exclusion, and a three-year extension of the mortgage insurance premium deduction.

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