Governor Signs CBA-Sponsored Bill On Mortgage Debt Forgiveness
On July 21, Governor Brown signed AB 1393 by Assembly Member Perea. This CBA sponsored measure extends important tax relief on the forgiveness of mortgage debt by conforming California law to federal law for the 2013 tax year. The measure further provides that no penalties or interest will be due with respect to the discharge of qualified principal residence indebtedness during the 2013 taxable year, regardless of whether the taxpayer reported the discharge on his or her income tax return for the 2013 taxable year. Homeowners who paid taxes resulting from the treatment of discharged mortgage debt as taxable income can apply to the Franchise Tax Board for a refund. You can view CBA’s press release here.