Taxation: cancellation of indebtedness: mortgage debt forgiveness.

The Personal Income Tax Law, in modified conformity to federal income tax laws, requires a borrower to include in his or her income, with certain exceptions, the amount of debt canceled or discharged, as specified. 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, in additional conformity to federal income tax laws, extend the operation of those provisions to debt that is discharged after January 1, 2007, and before January 1, 2013, and would modify the amount excluded from gross income. This bill would also provide conformity to specified provisions of the federal Emergency Economic Stabilization Act of 2008 relating to the exclusion of the discharge of qualified principal residence indebtedness, as defined, from a taxpayer's income if that debt is discharged on or after January 1, 2009, and before January 1, 2013. This bill would make legislative findings and declarations regarding the public purpose served by the bill. This bill would take effect immediately as a tax levy.