Debt Forgiveness and Its Impact on You

If you sold your Hendersonville home via a short sale, you are probably aware of the term “debt forgiveness”.  This is when a lender “forgives” a portion of what you owe on your home so you can sell it for less.  While the lender may “forgive” this debt, Uncle Sam does not.  In terms of taxes, any amount you would have owed but the bank decided not to collect on may be considered taxable income.  Since taxes are due soon (this year’s deadline is Tuesday, April 17, 2012), I thought it would be important to discuss debt forgiveness and its impact on you, the taxpayer.

As I said before, in general, forgiven debt is considered taxable income by the government.  In essence, you were given a certain amount of money when you signed your loan to begin with.  So, when the bank decides to forgive a portion of the debt, it is like they gave you a credit.  This is considered income and must, therefore, be taxed.  However, until the end of this year (December 31, 2012), a homeowner doesn’t have to pay taxes on the forgiven mortgage debt as long as the debt was from a principal residence and the amount forgiven didn’t exceed the original loan amount plus improvements.

This law also applies to foreclosures as well as a loan modification that includes a reduction in your Hendersonville home’s principal balance. The loan modification provision only applies if you are currently using the home in question as your permanent residence.  The non-taxable mortgage debt relief also only applies to the original loan amount.  It does not typically apply to second mortgages or home equity lines of credit that are not used for improvements on your home.

When a portion of a mortgage debt is forgiven, the bank will send out a 1099 to both the Hendersonville homeowner and the IRS that shows the amount forgiven.  You must then file a Form 982 to explain what the debt was forgiven for and why you shouldn’t have to pay taxes on it.  Whatever is taxable should then be filed on your 1040.  Talk to your tax adviser/preparer about this.  They should be able to answer any questions you have.

Rich Cooke, your Western North Carolina real estate specialist

Originally posted on my Hendersonville real estate blog here: http://rich-cooke.com/2012/03/22/debt-forgiveness-and-its-impact-on-you/.

Volunteers Wanted for Hendersonville Board of Adjustment

The Hendersonville City Council needs a citizen volunteer for its Hendersonville Board of Adjustment.  The City believes that the best way to make living in the community better for everyone is to have its residents be an integral part of its daily operations.  Volunteering for one of its boards and commissions is probably the best way you can do this.  As part of the Hendersonville Board of Adjustment, some of your duties will involve:

• Listening to and deciding on appeals from administrative officials regarding enforcement of the Zoning or Subdivision Ordinances as well as reviewing orders, requirements, decisions and determinations brought to the Board by an administrative official.
• Listening to and deciding on Zoning Ordinance variance requests.
• Interpreting the Official Zoning map and passing along any questions regarding disputes of lot lines or district boundaries to Zoning Ordinance administrators.
• Reviewing and issuing conditional use permits in regards to Zoning Ordinance rules and regulations.
• Entering (at a reasonable time) and examining private property to survey said property as it pertains to the official duties of the Board.
• Making requests for public hearings by the Board on any matter under the Board’s jurisdiction when needed.

Members of the Hendersonville Board of Adjustment meet at the Operations Center (305 Williams Street) at 1:30pm on the second Tuesday of the month to discuss matters brought before the Board.  Currently, the Board has one vacant alternate position available for a a Hendersonville resident.  If you’re interested in applying for the position, please fill out an application and hand it in to the Hendersonville City Hall.

Being a volunteer on a city board or commission enables you to help create a better living environment for the community.  Follow your passion and find a board that fits, whether it be the Hendersonville Board of Adjustment or another city commission.  The City always welcomes input from its residents to make living in Hendersonville even that much better.

Rich Cooke, your Western North Carolina real estate specialist

Originally published on my Western North Carolina real estate blog here: http://rich-cooke.com/2012/03/08/volunteers-wanted-for-hendersonville-board-of-adjustment/.

Top Remodeling Projects Buyers Love

With the rocky economy of the past few years, more Hendersonville homeowners have opted to stay in their homes for a little while rather than sell right away.  However, they may still need to make some modifications to their properties as their needs change.  Remodeling has fast become a hot commodity on the real estate front.  Even if you aren’t planning on selling your home right now, you should keep in mind the top remodeling projects buyers love for when you do eventually place your Hendersonville house on the market.

Kitchens
The heart of the home has always been the kitchen.  Hendersonville home buyers still love their kitchens.  It can easily make or break a sale.  Opening up a smaller kitchen, adding more shelving and storage, incorporating a pantry and/or adding an island are all ways to make your kitchen area more useful while you are living in it and more attractive to buyers when it comes time to sell it.

Outdoor Living Spaces
Studies have shown that, even during cold wintery weather, buyers still want an outdoor living space.  It is a natural extension of your Hendersonville home’s usable area.  Adding a deck (one of the best returns on investment, by the way), constructing a built-in barbecue and creating an entertainment area, complete with wiring for stereo and/or TV, are some options you may want to consider when creating your ideal outdoor space.

Smart Home
In today’s high tech society, we tend to be more and more dependent on electronic gadgets to get through our daily lives.  Upgrading your Hendersonville home’s wiring to accommodate this can be very appealing to future buyers as well as make your life a little easier.  This is especially true if you have an older home.  Upgrade your electrical panel so that it can handle a heavier workload.  Since more and more Americans are working from home, make sure your home is capable of utilizing internet service easily from any room.

Elderly Accommodations
As our population ages, our home needs change.  One trend that home builders have found recently is the request to have more elderly-friendly homes built.  Having at least one bedroom and full bathroom (with at least a shower) on the ground level is a popular floor plan nowadays.  Wider doors make it easier to maneuver a wheelchair.  Eliminating steps outside your Hendersonville home make entering less arduous for older folks.

If you’ve decided to sit tight in your Hendersonville home for a little bit but need to make adjustments to fit your lifestyle, keep these top remodeling projects that buyers love in mind before you begin construction.  Even if you aren’t selling your home today, you may eventually want/need to.  Wouldn’t it be better to have invested your money in something that makes it more attractive to buyers in the future?

Rich Cooke, your Western North Carolina real estate specialist

Originally posted on my Western North Carolina real estate blog here: http://rich-cooke.com/2012/03/01/top-remodeling-projects-buyers-love/.