Google+
Home | Daily Dose | One State Takes Mortgage Relief a Step Further
Print This Post Print This Post

One State Takes Mortgage Relief a Step Further

short-sale-four

In December, President Obama signed into law the omnibus bill that included a provision allowing homeowners to exclude forgiven mortgage debt from their gross income when filing federal tax returns.

More than a month later, California State Senator Cathleen Galgiani (D-Stockton) has introduced a bill that would extend tax relief on forgiven mortgage debt for homeowners when filing their state income tax returns. Senate Bill 907 would allow California homeowners who have either sold their home in a short sale or received some type of forbearance on their mortgage payments to exclude forgiven or cancelled mortgage debt from their state income tax forms when listing their income. Without legislation, both the California state and federal government would require homeowners to list cancelled mortgage debt as income.

California has been one of the states hardest hit by the housing crisis. In January 2009, distressed residential property sales in the state peaked at 67 percent—meaning REO sales and short sales accounted for approximately two-thirds of all residential home sales in the state during the month, according to data released by CoreLogic on Tuesday. By November 2015, the distressed sales share had fallen to slightly more than 8 percent in California, according to CoreLogic—but the state still ranked fourth in completed foreclosures for the 12-month period ending in November 2015 with 24,000. Not only that, but financial troubles have still persisted in the state. For example, in 2015, more than 80,000 consumers filed for bankruptcy in the state of California—tops among states and more than 24,000 more than second-place Illinois, according to AACER bankruptcy data reported by Epiq Systems.

Galgiani’s bill would provide much-needed state income tax relief to borrowers who cannot afford to pay taxes on money which was counted as income but money that they never actually received.

“This is a common-sense measure to avoid additional fiscal burdens on those who are facing financial uncertainty as a result of the economic crisis and often unemployment,” said Galgiani. “Taxpayers who have lost their homes could face an additional income tax liability of thousands of dollars or more.”

The exclusion of forgiven mortgage debt provision for federal income tax that was signed into law by President Obama in December is an extension of the Mortgage Forgiveness Debt Relief Act of 2007, originally signed into law by President George W. Bush. The original act relieved distressed homeowners from having to pay taxes on forgiven mortgage debt for the three calendar years of 2007 through 2009. That tax exemption was extended three more years until the end of 2012 with the Emergency Economic Stabilization Act of 2008, and it was extended until the end of 2013 with the American Taxpayer Relief Act of 2012. In December 2014, president Obama extended the tax exemption for forgiven mortgage debt until the end of 2014. Last month, it was extended until the end of 2017.

“We want to make sure that families who are trying to stay on their feet aren’t kicked while they are down,” said U.S. Rep. Tom Reed (R-New York), sponsor of the standalone proposal included in the omnibus bill. “Many times they have tried to do everything right, but still run up against tough financial times and the Federal government shouldn’t add insult to injury by levying a tax bill that could cost their homes.”

About Author: Brian Honea

Brian Honea
Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

115 comments

  1. Pingback: One State Takes Mortgage Relief Assistance Act a Step Further - Appraisal Buzz

  2. Pingback: One State Takes Mortgage Relief Assistance Act a Step Further - Brokers TitleBrokers Title

  3. Pingback: One State Takes Mortgage Relief a Step Further - Brokers TitleBrokers Title

  4. Pingback: Short Sale Without Delinquent Payments | Rates for CPA Services for SMB

  5. Pingback: 2nd Mortgage Foreclosure Laws Arizona | Foreclosure Sales

  6. Pingback: Can I Do A Short Sale With A Second Mortgage | Rates for CPA Services for SMB

  7. Pingback: Federal Assistance To Avoid Foreclosure | Rates for CPA Services for SMB

  8. Pingback: Tax Forgiveness Short Sale 2012 | Rates for CPA Services for SMB

  9. Pingback: Goverement Tax Foreclosure Sales | Rates for CPA Services for SMB

  10. Pingback: Short Sale Second Mortgage Approval | Rates for CPA Services for SMB

  11. Pingback: Cancellation Of Debt Income On A Short Sale | Rates for CPA Services for SMB

  12. Pingback: Illinois Home Foreclosure Help | Rates for CPA Services for SMB

  13. Pingback: Illinois State Law On Foreclosure | Rates for CPA Services for SMB

  14. Pingback: Home Mortgage Tax Form Practice

  15. Pingback: Short Sale Tax Forgiveness California | Rates for CPA Services for SMB

  16. Pingback: Obama Home Foreclosure | Rates for CPA Services for SMB

  17. Pingback: Short Sale Tax Relief 2012 Extension | Rates for CPA Services for SMB

  18. Pingback: California Short Sale Laws Second Mortgage | Rates for CPA Services for SMB

  19. Pingback: Foreclosure Tax Relief Extension | Rates for CPA Services for SMB

  20. Pingback: Bush Short Sale Tax Relief | Foreclosure Short Sales

  21. Pingback: Mortgage Forgiveness Debt Relief Act 1099-a - Live and News

  22. Pingback: Foreclosure Second Loan California | Rates for CPA Services for SMB

  23. Pingback: 2nd Mortgage In Short Sale | Rates for CPA Services for SMB

  24. Pingback: Home Foreclosure Debt Cancellation California | Rates for CPA Services for SMB

  25. Pingback: Short Sale 2nd Mortgage | Rates for CPA Services for SMB

  26. Pingback: Steps Of A Foreclosure | Foreclosure Info Sales

  27. Pingback: Mortgage Foreclosure Help Illinois | Rates for CPA Services for SMB

  28. Pingback: 2007 Short Sale Tax Relief | Rates for CPA Services for SMB

  29. Pingback: Debt Cancellation Income Foreclosure | Rates for CPA Services for SMB

  30. Pingback: California Law Foreclosure Second Mortgage | Best Real Estate Agents

  31. Pingback: Short Sale Tax Relief 2014 | Rates for CPA Services for SMB

  32. Pingback: California Foreclosure Tax Liability | Find Houses For Sale

  33. Pingback: American Taxpayer Relief Act Of 2012 Mortgage Insurance – Information

  34. Pingback: Bush Foreclosure Relief | Rates for CPA Services for SMB

  35. Pingback: Deficiancy Taxes On Short Sale Mortgages | Rates for CPA Services for SMB

  36. Pingback: 2nd Mortgage Foreclosure Laws California | Foreclosure Sales

  37. Pingback: Short Sale 1099 Exemption 2013 | Rates for CPA Services for SMB

  38. Pingback: California Short Sale Law Sb 458 | Rates for CPA Services for SMB

  39. Pingback: Steps Of Foreclosure In California | Rates for CPA Services for SMB

  40. Pingback: California Foreclosure Taxes | Rates for CPA Services for SMB

  41. Pingback: California 2nd Mortgage Foreclosure Laws | Rates for CPA Services for SMB

  42. Pingback: Mortgage Forgiveness Debt Relief Act Extension Short Sale | Rates for CPA Services for SMB

  43. Pingback: Short Sale 2nd Mortgage 2011 | Rates for CPA Services for SMB

  44. Pingback: Short Sale Second Mortgage Minnesota | Rates for CPA Services for SMB

  45. Pingback: Legal Form Postponement Of Foreclosure Sale New York | Rates for CPA Services for SMB

  46. Pingback: Foreclosure Assistance Stockton | Rates for CPA Services for SMB

  47. Pingback: Mortgage Forgiveness Debt Relief Act Foreclosure | Rates for CPA Services for SMB

  48. Pingback: Federal Foreclosure Relief Act | Rates for CPA Services for SMB

  49. Pingback: Foreclosure Relief Legislation | Rates for CPA Services for SMB

  50. Pingback: Short Sale Debt Forgiveness 2011 | Rates for CPA Services for SMB

  51. Pingback: Mortgage Short Sale Taxes | Rates for CPA Services for SMB

  52. Pingback: Emergency Foreclosure Relief | Rates for CPA Services for SMB

  53. Pingback: 2nd Mortgage Foreclosure Laws In California | Foreclosure Sales Listings

  54. Pingback: Foreclosure Tax Relief Act Extension 2013 | Rates for CPA Services for SMB

  55. Pingback: Foreclosure Relief Act 2012 | Rates for CPA Services for SMB

  56. Pingback: Foreclosure Liability California | Rates for CPA Services for SMB

  57. Pingback: Second Mortgage Short Sale Law | Rates for CPA Services for SMB

  58. Pingback: Foreclosure Tax Sale What About Existing Mortgage | Rates for CPA Services for SMB

  59. Pingback: Foreclosure Realif System | Rates for CPA Services for SMB

  60. Pingback: Government Taxed Foreclosure Sales | Homes For Sale Now

  61. Pingback: Obama Home Foreclosure Relief | Rates for CPA Services for SMB

  62. Pingback: Citifinancial 2nd Mortgage Short Sale | Rates for CPA Services for SMB

  63. Pingback: Foreclosure Tax Relief Act Of 2007 | Rates for CPA Services for SMB

  64. Pingback: Mortgage Foreclosure Relief Act 2007 | Commercial Real Estate Listings

  65. Pingback: Emc Mortgage Short Sale Form | Rates for CPA Services for SMB

  66. Pingback: Foreclosure Debt Forgiveness | Rates for CPA Services for SMB

  67. Pingback: Government Tax Foreclosure Sales .gov | Foreclosure Info Sales

  68. Pingback: Short Sale 2nd Mortgage Forgiveness | Rates for CPA Services for SMB

  69. Pingback: Mortgage Foreclosure Law Illinois | Rates for CPA Services for SMB

  70. Pingback: Foreclosure Debt Forgiveness Law | Rates for CPA Services for SMB

  71. Pingback: Foreclosure Debt Forgiveness Act | Rates for CPA Services for SMB

  72. Pingback: Debt Relief Act Of 2007 Short Sale | Foreclosure Info Sales

  73. Pingback: Foreclosure Relief Legislation | Find Houses For Sale

  74. Pingback: Foreclosure Relief 2013 | Rates for CPA Services for SMB

  75. Pingback: Mortgage Debt Forgiveness Act Foreclosure | Rates for CPA Services for SMB

  76. Pingback: Short Sale Tax Law 2013 | Find Houses For Sale

  77. Pingback: American Taxpayer Relief Act Of 2012 Short Sale | Foreclosure Short Sales

  78. Pingback: Adelanto California Foreclosure In Listing | Rates for CPA Services for SMB

  79. Pingback: Short Sale Tax Exemption Extension 2013 | Rates for CPA Services for SMB

  80. Pingback: Second Mortgage Short Sale Michigan | Rates for CPA Services for SMB

  81. Pingback: Foreclosure And Income Tax Return | Rates for CPA Services for SMB

  82. Pingback: Short Sale Tax Law 2013 | Rates for CPA Services for SMB

  83. Pingback: Short Sale Loan Forgiveness Act | Rates for CPA Services for SMB

  84. Pingback: Short Sale And Second Mortgage | Best Real Estate Agents

  85. Pingback: President Obama Foreclosure Relief | Rates for CPA Services for SMB

  86. Pingback: Federal Help For Short Sale | Foreclosure Sales

  87. Pingback: Short Sale Federal Tax Forgiveness | Rates for CPA Services for SMB

  88. Pingback: Short Sale Ny State | Rates for CPA Services for SMB

  89. Pingback: Short Sale Citibank Second Mortgage | Rates for CPA Services for SMB

  90. Pingback: American Home Mortgage Short Sale Forms | Foreclosure Short Sales

  91. Pingback: Short Sale And 2nd Mortgage | Rates for CPA Services for SMB

  92. Pingback: Foreclosure Rankings By State 2012 | Rates for CPA Services for SMB

  93. Pingback: Short Sale Debt Cancellation Taxable | Rates for CPA Services for SMB

  94. Pingback: Short Sale Debt Cancellation Tax | Rates for CPA Services for SMB

  95. Pingback: Foreclosure Debt Forgiveness Taxable Income | Rates for CPA Services for SMB

  96. Pingback: Short Sale Mortgage Forgiveness | Selling Your House

  97. Pingback: Short Sale Debt Relief Act | Rates for CPA Services for SMB

  98. Pingback: Short Sale Tax Relief 2011 | Find Houses For Sale

  99. Pingback: Second Mortgage Short Sale California | Rates for CPA Services for SMB

  100. Pingback: State Of Illinois Foreclosure Statute | Rates for CPA Services for SMB

  101. Pingback: Short Sale Debt Forgiveness California | Rates for CPA Services for SMB

  102. Pingback: Short Sale And Phantom Tax Debt Relief | Rates for CPA Services for SMB

  103. Pingback: Foreclosure 2007 Act | Rates for CPA Services for SMB

  104. Pingback: Obama Home Foreclosure Relief | Short Sale Houses

  105. Pingback: Short Sale Tax Relief 2012 | Rates for CPA Services for SMB

  106. Pingback: Mortgage Debt Relief Short Sale | Rates for CPA Services for SMB

  107. Pingback: State Home Mortgage Short Sale | Rates for CPA Services for SMB

  108. Pingback: Emc Mortgage Short Sale Forms | Best Real Estate Agents

  109. Pingback: Citifinancial 2nd Mortgage Short Sale | Rates for CPA Services for SMB

  110. Pingback: Citifinancial 2nd Mortgage Short Sale | Rates for CPA Services for SMB

  111. Pingback: Deficiancy Taxes On Short Sale Mortgages | Rates for CPA Services for SMB

  112. Pingback: Citifinancial 2nd Mortgage Short Sale | Selling Your House

  113. Pingback: 4cyn5et4m5t94c5t9m4vn54cx65

  114. Pingback: http://falschgeldkaufen.blogspot.com/2017/01/wo-kann-ich-falschgeld-kaufen.html

  115. Pingback: Homepage

Leave a Reply

Scroll To Top