Real Estate Blog

Perea’s tax-relief bill passes revenue and taxation committee

Henry T. Perea, D-Fresno
Henry T. Perea, D-Fresno

Assemblymember Henry T. Perea, D-Fresno, introduced a bill in January that would extend tax relief on mortgage debt for 2014.

Homeowners have been wondering where the bill stands.

On Tuesday, Assembly Bill 99 passed the Assembly Revenue and Taxation Committee. It is now waiting approval in the Assembly Appropriations Committee.

The bill would spare California homeowners from paying taxes on their mortgage debt after a short sale or principal loan modification. The forgiven debt is considered taxable income. Homeowners whose debt was forgiven by their lender before Jan. 1, 2015, could qualify.

It’s the second of such bills introduced by Perea. In 2014, Gov. Jerry Brown signed AB 1393 which extended the tax relief program through 2013.

“AB 99 will help further the legislature’s affordable housing goals by ensuring that homeowners who were successful in negotiating a lower mortgage payment will not be burdened by a state tax obligation,’ said Beth Mills, vice president of communications for the California Bankers Association, the bill sponsors.