A Reverse Mortgage Loan Is a Major Decision That Might Involve Family

Tax Act

Did you ever get the feeling that maybe you should rethink your position just before a deal is closed, then later regret not acting on the feeling?  If you have, you experienced what people in sales refer to as a “moment of objective clarity.”  You are referred to as a mook once you leave and your money is securely in their hands.  A mook is a person who subconsciously knows that they are being taken for a ride but cannot pinpoint why and therefore sign the deal and leave happy on the outside and wondering on the inside.  Being a mook is caused by a lack of complete research on the buyer’s part and can be avoided.

Prepare a Contrasting List

If you are considering a reverse mortgage loan, you might want to stop and take a good long look at the reverse mortgages pros and cons before you proceed.  Pros and cons refers to a list that you could make that has the positive and negative sides to each point of anything, whether it be the advantages or reverse mortgage disadvantages.  This type of life changing decision warrants a good long look.

Getting What We Wish For

A reverse mortgage is an important step in your retired life that could be the answer to a prayer.  We all wish that we will have a comfortable retirement t look forward to but sometimes, you get what you wish for and that could come back and bite you or your heirs if you do not have a firm understanding of the reverse mortgages disadvantages.  Understanding what is good about a reverse mortgage is easy.

Avoid Being a Mook

The Internet is the perfect place to start your search into a reverse mortgages pros and cons.  Have a pencil and paper at the ready when you conduct your search and dust off that printer.  Knowing all the facts is what it is all about.  Discuss your pros and cons list with any family that has a stake in your decision and be especially prepared with the reverse mortgage disadvantages.  You know that they will want to know about that.  Don’t be a mook.  Do your research.

Debt Forgiveness and Mortgages

Tax Act

Debt Forgiveness and Mortgages

If you had all or part of a mortgage forgiven during the last three tax years, you may be able to avoid paying taxes on the forgiven mortgage debt. A law passed in 2007 called the Mortgage Forgiveness Debt Relief Act allows otherwise taxable mortgage forgiveness to be tax free up to $2 million dollars.

Now if you file separately from your spouse, you can only claim half of the limit yourself. But joint filers can take the full $2 million. Restructure of mortgage debt is one case where you might need this tax benefit in addition to debt that was eliminated through a foreclosure. One exception is debt consolidated from other sources that was originally used for other purposes unrelated to your home.

File IRS Form 982 with your tax return to claim the debt forgiveness. The debt forgiveness is for primary residences only as the Form 982 describes. To find the amounts of debt that was forgiven for the tax year, look for a 1099-C from the mortgage holder. This tax form will provide the total amount information that you need.

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