Bill Text: CA AB1393 | 2013-2014 | Regular Session | Chaptered

California Assembly Bill 1393 (Prior Session Legislation)

Bill Title: Personal income taxes: income exclusion: mortgage debt forgiveness.

Spectrum: Moderate Partisan Bill (Democrat 6-1)

Status: (Passed) 2014-07-21 - Chaptered by Secretary of State - Chapter 152, Statutes of 2014. [AB1393 Detail]

Download: California-2013-AB1393-Chaptered.html

BILL NUMBER: AB 1393	CHAPTERED
	BILL TEXT

	CHAPTER  152
	FILED WITH SECRETARY OF STATE  JULY 21, 2014
	APPROVED BY GOVERNOR  JULY 21, 2014
	PASSED THE SENATE  JUNE 30, 2014
	PASSED THE ASSEMBLY  JULY 3, 2014
	AMENDED IN SENATE  JUNE 15, 2014
	AMENDED IN SENATE  MAY 20, 2014
	AMENDED IN SENATE  APRIL 7, 2014
	AMENDED IN SENATE  SEPTEMBER 6, 2013

INTRODUCED BY   Assembly Member Perea
   (Principal coauthors: Senators Cannella and Evans)
   (Coauthors: Assembly Members Cooley, Fox, Muratsuchi, and
Quirk-Silva)

                        MARCH 4, 2013

   An act to amend Section 17144.5 of the Revenue and Taxation Code,
relating to taxation, and declaring the urgency thereof, to take
effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1393, Perea. Personal income taxes: income exclusion: mortgage
debt forgiveness.
   The Personal Income Tax Law provides for modified conformity to
specified provisions of federal income tax law relating to the
exclusion of the discharge of qualified principal residence
indebtedness, as defined, from an individual's income if that debt is
discharged after January 1, 2007, and before January 1, 2013, as
provided. The federal American Taxpayer Relief Act of 2012 extended
the operation of those provisions to qualified principal residence
indebtedness that is discharged before January 1, 2014.
   This bill would conform to the federal extension, discharge
indebtedness for related penalties and interest, and make legislative
findings and declarations regarding the public purpose served by the
bill.
   This bill would declare that it is to take effect immediately as
an urgency statute.


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(a)(1)(E) of the Internal Revenue Code,
is modified to provide that the amount excluded from gross income
shall not exceed $500,000 ($250,000 in the case of a married
individual filing a separate return).
   (b) Section 108(h)(2) of the Internal Revenue Code, 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.
   (c) 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 or interest shall be due with
respect to the discharge of qualified principal residence
indebtedness during the 2007 or 2009 taxable year regardless of
whether or not the taxpayer reports the discharge on his or her
return for the 2007 or 2009 taxable year.
   (d) The amendments made by Section 202 of the American Taxpayer
Relief Act of 2012 (Public Law 112-240) to Section 108 of the
Internal Revenue Code shall apply.
   (e) The changes made to this section by the act adding this
subdivision shall apply to discharges of indebtedness that occur on
or after January 1, 2013, and before January 1, 2014, and,
notwithstanding any other law, no penalties or interest shall be due
with respect to the discharge of qualified principal residence
indebtedness during the 2013 taxable year, regardless of whether the
taxpayer reports the discharge on his or her income tax return for
the 2013 taxable year.
  SEC. 2.  The amendments made by this act that conform to the
amendments made by Section 202 of the American Taxpayer Relief Act of
2012 (Public Law 112-240) to Section 108 of the Internal Revenue
Code, apply to qualified principal residence indebtedness that is
discharged on and after January 1, 2013, and before January 1, 2014.
The Legislature finds and declares that the amendments made by this
act and the retroactive application contained in the preceding
sentence are necessary for the public purpose of conforming state law
to the amendments to the Internal Revenue Code as made by the
American Taxpayer Relief Act of 2012 (Public Law 112-240), thereby
preventing undue hardship to taxpayers whose qualified principal
residence indebtedness was discharged on and after January 1, 2013,
and before January 1, 2014, and do not constitute a gift of public
funds within the meaning of Section 6 of Article XVI of the
California Constitution.
  SEC. 3.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to provide tax relief to distressed homeowners at the
earliest possible time, it is necessary that this act take effect
immediately.