Top Ranked Illinois Broker Identifies IRS Tax Loophole in Light of Expired Debt Relief Act
Chicago distressed property real estate broker with RE/MAX identifies IRS tax loophole for struggling homeowners
CHICAGO — Bert Gor, real estate broker with RE/MAX Northern Illinois and president of The Short Sale Group, Inc., has identified a tax loophole that could help struggling homeowners nationwide who are in need of a short sale.
The Mortgage Forgiveness Debt Relief Act of 2007 (MFDRA), in part, was created to provide tax relief on canceled debt in relation to short sales. However, it has since expired as of Dec. 31, 2013. **UPDATE- renewed each year since its inception in 2007***
In light of this, Gor and his team have researched the IRS Tax Code and have successfully identified a solution to avoid income tax on forgiven debt, not just for underwater homeowners in Illinois, but also nationwide.
Through the tax loophole, distressed homeowners who fall under a basic IRS formula qualify for an exemption, according to Gor. It is estimated that Gor’s identification of the tax loophole will ultimately help thousands of struggling homeowners in need of a short sale avoid having to pay income tax.
Presently, a very large number of struggling homeowners are under the assumption that they will have to pay income tax on any forgiven amount related to a short sale, while some, far worse, are under the assumption that they can simply walk away from their property, not fully realizing the implications of foreclosing on their home.
On a local level, Illinois currently has the third-highest rate of homeowners in foreclosure, with 1 out of 605 homes in some sort of foreclosure, while nationwide, 1 out of 1,136 homes are in a similar state. In its U.S. Home Equity & Underwater Report for December 2013, U.S. real estate data supplier RealtyTrac reported that 9.3 million U.S. residential properties were deeply underwater, representing 19 percent of all properties with a mortgage.
Last year, short sales and foreclosure-related sales accounted for a combined 16.2 percent of all U.S. residential sales, up from 14.5 percent of all sales in 2012. Nationally recognized statistical rating organization Fitch Ratings, however, expects a decline in the volume of short sales due to the expiration of the MFDRA.
“As far as I am concerned, there is only one acceptable outcome to a short sale, and that is not owing anything when it is all said and done,” Gor says.
A veteran of the real estate industry, Gor, and the Naperville, Ill., RE/MAX Professionals Select office have successfully completed in excess of 1,000 short sales since 2007. He and his team pride themselves on successfully negotiating deficiencies for short sale clients, helping them avoid foreclosure and bankruptcy altogether.
In recent years, he has personally negotiated individual losses in excess of $1 million, as he and his team have helped homeowners with multiple lien holders, state and federal tax liens, and numerous other liabilities related to title encumbrances.
Gor pulls the passion and drive he applies to his work from personal experience, as he was once a distressed homeowner himself. The potential impact Gor can have on his clients’ lives is his favorite aspect of his career.
“No one can imagine how rewarding it is when I get to come home to my wife and tell her I just saved someone from foreclosure, which could have been only days away,” he says.
To learn more about Gor’s findings, contact bert@bertgor.com or call 630-842-6000.
ABOUT BERT GOR: Bert Gor has 17 of years of working experience in the Chicago real estate industry. He is currently a real estate broker with RE/MAX Northern Illinois and is president of The Short Sale Group, Inc. A Certified Distressed Property Expert (CDPE), Gor has dedicated the last 13 years of his career to helping underwater homeowners in the face of foreclosure, an effort that has garnered him recognition in Chicago Agent magazines’s “Who’s Who in Chicago Real Estate” three years in a row, as well as making the ranks of the prestigious “Top 5” of all Northern Illinois RE/MAX agents. Through their efforts, Gor and his office have successfully completed in excess of 1,000 short sales since 2007. Gor can be contacted at bert@bertgor.com or 630-842-6000.
