The California Franchise Tax Board (FTB) will not tax discounts – forgiven debt – on recourse mortgages (refinances and equity loans) in 2009. Thanks to the 2010 Conformity Act, also known as Senate Bill (SB) 401, California will exempt forgiven recourse debt, including short sales and any cramdowns of the loan’s principal balance, until 2012. Taxpayers who have already filed their 2009 state tax returns are now eligible for a refund of this amount. [For more on this subject, see the March 2010 first tuesday news blog, California Tax Surprise for Short Sales and Foreclosures]
Re: “California, corporate, personal income taxes: impact of 2010 conformity act on personal taxes discussed” from CCH Tax Reporting
