Stimulus Package To Give Market a Boost

February 19, 2008

In this special video edition of the NAR President’s Podcast, 2008 NAR President Dick Gaylord explains how the economic stimulus package will give housing a big boost, and why we need to pass FHA and GSE Reform now.

DEBT RELIEF BILL CLEARS KEY SENATE COMMITTEE

A bill that would make it possible for California taxpayers to avoid paying taxes on forgiven mortgage debt through a short sale, short payoff or some other loan modification, recently passed a key senate committee.

Senate Bill (SB) 1055, authored by Sen. Michael J. Machado, passed the Senate Revenue and Taxation Committee on an 8-0 vote. The measure would help California taxpayers whose lenders have forgiven a portion of their mortgage debt, by allowing them to exclude the forgiven debt from their incomes for state income tax purposes. Under existing state tax law, forgiven debt on mortgages is taxable to the borrower as ordinary income for the year in which the debt is forgiven.

“SB 1055 an example of something the Legislature can do to help mitigate the pain that the mortgage crisis is causing,” said Machado. “The last thing we want to do to a borrower who has just lost his or her home is hit them with a higher tax bill.”

The measure is now before the full Senate.

Source: C.A.R.