BILL NUMBER: SB 30	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Calderon
   (Coauthors: Senators Block, Correa, Lieu, and Price)

                        DECEMBER 3, 2012

   An act to amend Section 17144.5 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 30, as introduced, Calderon. Taxation: cancellation of
indebtedness: mortgage debt forgiveness.
   The Personal Income Tax Law conforms to specified provisions of
the federal Mortgage Forgiveness Debt Relief Act of 2007, relating to
the exclusion of the discharge of qualified principal residence
indebtedness, as defined, from a taxpayer's income if that debt is
discharged after January 1, 2007, and before January 1, 2010, as
provided. The federal Emergency Economic Stabilization Act of 2008
extended the operation of those provisions to debt that is discharged
before January 1, 2013.
   This bill would extend the operation of the exclusion of the
discharge of qualified principal residence indebtedness to debt that
is discharged before January 1, 2014.
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17144.5 of the Revenue and Taxation Code is
amended to read:
   17144.5.  (a) Section 108(a)(1)(E) of the Internal Revenue Code
 ,  is modified  to   as
follows: 
    (1)     To  provide that the amount
excluded from gross income shall not exceed $500,000 ($250,000 in the
case of a married individual filing a separate return). 
   (2) By substituting the phrase "January 1, 2014" for the phrase
"January 1, 2013" contained therein. 
   (b) Section 108(h)(2) of the Internal Revenue Code, is modified by
substituting the phrase "(within the meaning of section 163(h)(3)
(B), applied by substituting '$800,000 ($400,000' for '$1,000,000
($500,000' in clause (ii) thereof)" for the phrase "(within the
meaning of section 163(h)(3)(B), applied by substituting '$2,000,000
($1,000,000' for '$1,000,000 ($500,000' in clause (ii) thereof)"
contained therein.
   (c) This section shall apply to discharges of indebtedness
occurring on or after January 1, 2007, and, notwithstanding any other
law to the contrary, no penalties or interest shall be due with
respect to the discharge of qualified principal residence
indebtedness during the 2007 or 2009 taxable year regardless of
whether or not the taxpayer reports the discharge on his or her
return for the 2007 or 2009 taxable year.
  SEC. 2.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.