Cash Flow Planning for Life - Helping you reach your personal & professional financial goals.

Cash Flow Planning for Life

Helping you reach your personal & professional financial goals.

Emergency Economic Stabilization Act - Bailout-house2ndVOTE

This is the third tip in our series 7 Things You Should Know About the Tax Consequences of Debt Forgiveness which is also available as a free eBook from your Fort Myers Accounting Firm.

The Emergency Economic Stabilization Act of 2008, is most commonly referred to as “the bailout” of the U.S. financial system. As most people are aware, it provided up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets that were clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit.

However, there were other components of this Act that you, as a taxpayer, should be aware of. Basically, the Emergency Economic Stabilization Act of 2008 focused on these 3 components:

  1. Alternative Minimum Tax relief for individuals
  2. Financial bailout related changes (including relief for banks, new compensation deduction limits, and debt forgiveness relief)
  3. Extender Provisions

For the sake of learning the tax consequences of debt forgiveness, we’re going to focus on #3, the “Extender Provisions”. This Act extended the treatment of forgiven debt under the Mortgage Forgiveness Debt Relief Act of 2007, so that the benefits for taxpayers are extended through the end of 2012.

If you have further questions about the Emergency Economic Stabilization Act and how it may affect your income taxes, please contact us online, call (239) 384-9688, or download our FREE eBook 7 Things You Should Know About the Tax Consequences of Debt Forgiveness. When it’s time for us to meet, here is a good way for you to prepare before meeting with your tax planner.

-Mark

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This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER: The information within this post is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.

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