Seattle Mortgage Rates Today 1/2/13: Republicans are perturbed with the “fiscal cliff” deal they settled for by a vote of 257 to 167 in the House. Although the current deal ensures no tax hikes for 98% of American families, the deal did not address entitlement spending cuts to government programs for the poor and retirees. Knowing all well that they lost the fiscal cliff debate, Republicans plan to leverage the need to raise the debt ceiling against President Obama when that time arises in 2 months’ time. The stock market reacted positively upon the news of the deal; however, with debt ceiling woes about to come to the forefront, investors may be finding themselves in the security of bonds given the uncertainty of our dysfunctional Congress. Frighteningly so, as the government attacks the debt ceiling issue, global perception of the U.S. government will be at its lowest.
Very important for all home owners who are currently in a short sale position: With the fiscal cliff resolution addressed and the Mortgage Forgiveness Debt Relief Act not even being discussed for a possible extension for the 12/31/12 deadline one must consider their possible tax burden. This will be a serious tax burden in 2014 when filing for 2013 taxes. On average, it is calculated that a home owner could owe $25,000 or more to the IRS in income tax. With the housing market and economy in recovery mode, it would not seem that an extension would be granted or needed. The “Fiscal Cliff” is a clear example of the pain government has to endure in order to balance the budget. Taxation on short sales, foreclosures and mortgage reductions will be considered income. This is a perception that must be considered as reality now. “Consult a CPA or Tax adviser for your specific situation”
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