In our opinion, one of the only good things to come out of the fiscal cliff negotiations is an extension of the Mortgage Forgiveness Debt Relief Act. As this article accurately describes, extension means that most homeowners will continue to be exempt from paying federal income tax on debt forgiven by lenders through foreclosure, short sale or loan modification.
There remains little to like about this fiscal cliff deal, but not further burdening homeowners who are struggling with mortgage debt is something.