The Housing Chronicles Blog: California to also offer income tax relief to foreclosed borrowers

Tuesday, February 5, 2008

California to also offer income tax relief to foreclosed borrowers

In a bid to match the federal government's temporary stay on taxing forgiven mortgage debt as income, California lawmakers have introduced Senate Bill 1055, which would apply to short sales or other types of forgiven mortgage debt between January 1, 2007 and before January 1, 2009. From a story in today's Sacramento Bee:

State lawmakers have introduced Senate Bill 1055 to give tax relief to homeowners in trouble. It applies to any mortgage debt forgiven after Jan. 1, 2007, and before Jan. 1, 2009. Just like the federal law, it would be a temporary measure to expire when the housing market rebounds.

None of this applies to investors, however.

The bill is before the Senate Committee on Revenue and Taxation.

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