Bill Text: CA AB111 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Taxation: cancellation of indebtedness: mortgage debt

Spectrum: Moderate Partisan Bill (Republican 9-2)

Status: (Introduced - Dead) 2010-02-02 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB111 Detail]

Download: California-2009-AB111-Amended.html

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BILL NUMBER: AB 111	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 5, 2009

INTRODUCED BY   Assembly Member Niello
    (   Principal coauthor:   Assembly Member
  Galgiani   ) 
   (Coauthors: Assembly Members  DeVore  
  and Jeffries   DeVore, 
Harkey,   Jeffries,   and Silva  )
   (Coauthors: Senators Cox,  Denham,   DeSaulnier,
 Huff, and Runner)

                        JANUARY 13, 2009

   An act to amend Section 17144.5 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 111, as amended, Niello. Taxation: cancellation of
indebtedness: mortgage debt forgiveness.  The Personal Income Tax Law
conforms to specified provisions of the federal Mortgage Forgiveness
Debt Relief Act of 2007, relating to the exclusion of the discharge
of qualified principal residence indebtedness, as defined, from a
taxpayer's income if that debt is discharged after January 1, 2007,
and before January 1, 2009, as provided.
   This bill would extend the operation of those provisions to debt
that is discharged after January 1, 2007, and before January 1, 2012.

   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17144.5 of the Revenue and Taxation Code is
amended to read:
   17144.5.  (a) Section 108 of the Internal Revenue Code, relating
to income from discharge of indebtedness, as amended by Section 2 of
the Mortgage Forgiveness Debt Relief Act of 2007 (Public Law
110-142), shall apply, except as otherwise provided.
   (b) Section 108(a)(1)(E) of the Internal Revenue Code, as added by
Section 2 of the Mortgage Forgiveness Debt Relief Act of 2007
(Public Law 110-142), is modified by substituting the phrase "January
1, 2012" for "January 1, 2010" contained therein.
   (c) Section 108(a)(1)(E) of the Internal Revenue Code, as added by
Section 2 of the Mortgage Forgiveness Debt Relief Act of 2007
(Public Law 110-142), is additionally modified to provide that the
amount excluded from gross income shall not exceed $250,000 ($125,000
in the case of a married individual filing a separate return).
   (d) Section 108(h)(2) of the Internal Revenue Code, as added by
Section 2 of the Mortgage Forgiveness Debt Relief Act of 2007 (Public
Law 110-142), is modified by substituting the phrase "(within the
meaning of section 163(h)(3)(B), applied by substituting '$800,000
($400,000' for '$1,000,000 ($500,000' in clause (ii) thereof)" for
the phrase "(within the meaning of section 163(h)(3)(B), applied by
substituting '$2,000,000 ($1,000,000' for '$1,000,000 ($500,000' in
clause (ii) thereof)" contained therein.
   (e) This section shall apply to discharges of indebtedness
occurring on or after January 1, 2007, and, notwithstanding any other
law to the contrary, no  penalties   penalty
 or interest shall be due with respect to the discharge of
qualified principal residence indebtedness during the 2007 taxable
year regardless of whether or not the taxpayer reports the discharge
on his or her return for the 2007 taxable year.
  SEC. 2.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.