Still looking for answers!!
Looks like the Mortgage Forgiveness Tax Relief Act of 2015 (H.R. 1002) might make it all the way to law. This would extend the forgiveness through 2016. We have seen the extension of HARP 2.0 and HAMP through 2016, so hopefull Mortgage Debt relief is soon to follow.
California may be a different story. According to the State Franchise Tax Boards Website;
Assembly Bill 1393 (Ch.152) was passed retroactively extending California’s partial conformity to the federal exclusion of income from the discharge of qualified mortgage debt to tax year 2013. Specifically, the bill includes the following:
- The California exclusion is extended to apply to discharges of qualified mortgage debt occurring on or after January 1, 2013, and before January 1, 2014.
- Qualified principal residence indebtedness is limited to $800,000 ($400,000 for taxpayers filing separate).
- Taxpayers may exclude from gross income up to $500,000 ($250,000 for taxpayers filing separate) of qualified mortgage debt forgiven.
So Here is the Question: If you sold January 2, 2014 or after, is the forgiven debt taxble in California??
Is there still a way to exclude this as Taxable Income on your California State Return?
I am not a Tax Attorney or CPA, and do not even pretend to give tax advice, I leave that up to the professionals, with that said, I look forward to all of your ideas and responses!
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