Today begins our series about new 2015 California Real Estate laws. Click here to see the series.
2015 Real Estate Laws: Tax Exemption for Mortgage Debt Forgiveness
This law extends California’s exclusions of taxation of mortgage debt forgiveness for qualified principal residence indebtedness in partial conformity with the federal Mortgage Forgiveness Debt Relief Act of 2007. Qualified principal residence indebtedness is limited to $800,000 ($400,000 for taxpayers filing separately). Forgiven debt will not be treated as cancellation of debt income, but will instead be capital gains. Taxpayers may exclude from capital gains up to $500,000 ($250,000 for taxpayers filing separate) of qualified mortgage debt forgiven. See Revenue and Taxation Code §17144.
Questions about this new law? We’re happy to help. Call Jade (949-246-2078) or Danny (949-413-6967), or email them for more information.