Tomahawk, WI 02/10/2014 (BasicsMedia) – JPMorgan Chase & Co (NYSE:JPM) is set to benefit from a $1.5 billion debt relief, or write –off. What JPM will boast of as a tax relief, homeowners will initially enjoy it as a debt relief. This is in accordance to the terms reached upon between the two as part of a settlement. Now, one may not believe that debt relief can come back to haunt homeowners, but the truth is that under this deal, it does. Homeowners will enjoy this relief, until the taxman comes to collect what is owed. As homeowners will report this as taxable income, they will lose more in the end.

Many families that are entitled to this relief of $1.5 billion from JPMorgan Chase & Co (NYSE:JPM), have lost their homes, and could do with this money to help them find new homes to settle in. Moreover, some of these families barely managed to keep their homes and not lose them. To such families, the thought of seeing the taxman coming back to collect the little they receive through taxable income, is not welcome at all. Families now have to make decisions regarding what they think about the money they will receive from JPM in this deal, which the authorities have been encouraging.

Initially the tax exemption was designed to help families that felt they were paying mortgages that were worth more than the actual values of their homes. Under this deal with JPMorgan Chase & Co (NYSE:JPM), they will not enjoy the tax exemption that they hoped for. In essence, homeowners are the losers in this deal, while JPM has somewhat gained from all these. More than 6.4 million households still need and qualify for this tax exemption. If this deal with JPM runs its course, and negative reports such as the current one continue, it is hard to imagine that homeowners will be excited.

Under the US taxation system, if anyone forgives you and tells you that you do not have to pay back the debt you owe, the IRS will list that as income, and expect you to pay tax. This is what will happen when the homeowners expected to be beneficiaries of the $1.5 billion exemption from JPMorgan Chase & Co (NYSE:JPM) discover that they owe the taxman huge amounts in tax bills. As to whether they will pay the amount that remains to be seen. What is not in doubt is the fact that none of the homeowners benefiting from this deal will be too enthusiastic when they learn about this matter.

The only way that homeowners can benefit from a bit of IRS’ leniency, is in situations where they prove that they are insolvent or bankrupt. These are the only two conditions under which IRS is compelled to not ask you to settle the tax bills that you owe. Homeowners who are entitled to this money from JPM are struggling to make ends meet. The only way out for homeowners does not depend on JPMorgan Chase & Co (NYSE:JPM) but on Congress and the US government. The Congress can decide to extend the timeframe for the exemption that came to an end on Dec 31, 2013.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.