SB 30, as amended, 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 on or after January 1, 2013, and before January 1, 2014.begin insert The bill would become operative only if SB 391 is enacted and takes effect.end insert
This bill would take effect immediately as a tax levy.
end deleteThis bill would declare that it is to take effect immediately as an urgency statute.
end insertVote: begin deletemajority end deletebegin insert2⁄3end insert.
Appropriation: no.
Fiscal committee: yes.
State-mandated local program: no.
The people of the State of California do enact as follows:
Section 17144.5 of the Revenue and Taxation
2Code is amended to read:
(a) Section 108(a)(1)(E) of the Internal Revenue
4Code is modified as follows:
5(1) To provide that the amount excluded from gross income
6shall not exceed $500,000 ($250,000 in the case of a married
7individual filing a separate return).
8(2) By substituting the phrase “January 1, 2014” for the phrase
9“January 1, 2013” contained therein.
10(b) Section 108(h)(2) of the Internal Revenue Code, is modified
11by substituting the phrase “(within the meaning of section
12163(h)(3)(B), applied by substituting ‘$800,000 ($400,000’ for
13‘$1,000,000 ($500,000’ in clause (ii) thereof)” for
the phrase
14“(within the meaning of section 163(h)(3)(B), applied by
15substituting ‘$2,000,000 ($1,000,000’ for ‘$1,000,000 ($500,000’
16in clause (ii) thereof)” contained therein.
17(c) This section shall apply to discharges of indebtedness
18occurring on or after January 1, 2007, and, notwithstanding any
19other law to the contrary, no penalties or interest shall be due with
20respect to the discharge of qualified principal residence
21indebtedness during the 2007 or 2009 taxable year regardless of
22whether or not the taxpayer reports the discharge on his or her
23return for the 2007 or 2009 taxable year.
24(d) The amendments made to this section by the act adding this
25subdivision shall apply to discharges occurring on or after January
261, 2013.
This act provides for a tax levy within the meaning of
28Article IV of the Constitution and shall go into immediate effect.
This act shall become operative only if Senate Bill 391
30of the 2013-14 Regular Session is enacted and takes effect.
This act is an urgency statute necessary for the
2immediate preservation of the public peace, health, or safety within
3the meaning of Article IV of the Constitution and shall go into
4immediate effect. The facts constituting the necessity are:
5In order to provide tax relief to distressed homeowners at the
6earliest possible time, it is necessary for this act to take effect
7immediately.
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