Gulf of Mexico

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What is Cancellation of Debt?

Overview of IRS Cancelation of Debt Income, from the Taxpayer Advocate Service What is Cancellation of Debt? If a taxpayer borrows money from a commercial lender and the lender later cancels or forgives the debt, the taxpayer may have to include the cancelled amount as income for tax purposes, depending on the circumstances. When the taxpayer borrowed the money he or she was not required to include the loan proceeds as income because the taxpayer had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount received as loan proceeds is normally reportable as income because the taxpayer no longer has an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to the taxpayer and the IRS on Form 1099-C, Cancellation of Debt. debbiesmall.net

Short Sales, Foreclosures and Income Taxes: a Summary

Short Sales, Foreclosures and Income Taxes: a Summary If a taxpayer owes mortgaged debt to a lender and the lender cancels or forgives that debt in a short sale or foreclosure, in general the cancelled debt is taxable. However, the canceled amount may be excluded from taxation under the Mortgage Forgiveness Debt Relief Act of 2007. In general, this law allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure or short sale, qualifies for the relief. This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2,000,000 of forgiven debt is eligible for this exclusion ($1,000,000 if married filing separately).

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Running

Running: http://youtu.be/Uif6IoDWuus

What is a CDD?

In addition to and HOA, some neighborhoods also have a CDD. Today I was asked what CDD stands for and exactly what it is. Here you go: A Community Development District (CDD) is a local, special purpose government framework authorized by Chapter 190[1] of the Florida Statutes as amended and is an alternative to municipal incorporation for managing and financing infrastructure required to support development of a community.[1] Authority for CDDs was established by Florida's "Uniform Community Development District Act of 1980". The legislation was considered a major advancement in managing growth efficiently and effectively. Although CDD's provided a new mechanism for the financing and management of new communities, their operation was consistent with the regulations and procedures of local governments, including state ethics and financial disclosure laws for CDD supervisors.[2] All meetings and records must comply with the Florida Sunshine Law and an annual audit is also required.[2] As of 2012, Florida had over 600 CDDs with municipal bonds totaling $6.5 billion. Nearly three-quarters of them were established during the housing boom years between 2003 and 2008. The developer makes payments to the CDD for all properties in the district that they own. As long as new homes were selling, they had the money to cover that expense. When the bottom dropped out of the housing market in 2008, property sales in CDDs plummeted, as did developer income. Many developers did not have cash reserves to cover more than a year of CDD payments, so they had no choice but to declare bankruptcy, and 168 CDDs have defaulted on municipal bonds valued at $5.1 billion.[3] County politicians endorse them because they increase property values (plus taxes) and create infrastructure without cost to government. Developers love them because they don't have to use their own money to pay for all the development infrastructure up front. Residents like them because the initial price of their property should be lower due to deferred infrastructure costs.[4] The theory behind CDDs holds that services and public facilities used by residents and landowners will be available early in the development process, and are controlled by those who use them, and are paid for by self-imposed assessments and fees. Because the CDD is controlled by the landowners/residents, the decision of what services are offered and which facilities are constructed is up to the landowners/residents, not the developer. The cost of capital for CDDs is lower than that of the developer, saving money. Services can be bid out to private companies or provided by the CDD, and residents are not at the mercy of developer-owned enterprises.[2][4]

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