Congress has indicated that all the write-offs homeowners enjoyed in the past are set to expire at the end of the year and see no further relief any time soon.

Last year, Congress decided at the last minute to extend assistance for mortgage debt and deductions for mortgage insurance payments. Currently, The House and Senate are debating over a budget and considering refurbishing the tax system, which may result in a loss of tax breaks for homeowners.

Before the mortgage debt relief law changed in 2007, any borrower who had a debt canceled by a creditor would have to report the amount forgiven as ordinary income, which could be taxed by the federal government. For example, if a loan modification reduced someone’s mortgage balance by $50,000, the IRS would consider that amount as taxable income, although the borrower never actually received the money.

If nothing is done to assist homeowners, potential short sellers will not be able to close the deal until 2014 and may face an abundance of income taxes as a part of the sale.

Other tax benefits that are on the verge of expiring next year include the 10% credit on homes for energy-improvement installations, the $2,000 credit for newly built homes that meet federal energy efficiency standards and the mortgage-insurance premium write-off for homeowners who obtain a Fannie Mae, Freddie Mac, Federal Housing Administration or VA guaranty loan by putting down less than 20% on their purchases.