TAX BREAKS

You may already know this but the federal Mortgage Forgiveness Debt Relief Act of 2007 was passed in December. Here is a mile-high overview of the Act.

Homeowners who experience a foreclosure, short sale, deed in lieu of foreclosure or loan modification may be able to exclude lender-forgiven mortgage debt from taxable ordinary income.

Homeowners may be able to deduct the cost of mortgage insurance.

A homeowner whose spouse has died may be allowed up to two years to exclude $500,000 of profit from the sale of a principal residence from capital gains tax.

If you think you qualify, check with your tax advisor.