Mortgage Forgiveness Debt Relief Act of 2007

[Tom H]

It looks like this bill passed the Senate yesterday, possibly on the way towards becoming law. Not sure of the specifics though.

From the web: http://www.govtrack.us/congress/bill...48&tab=summary


The following summary is provided by the Congressional Research Service, which is a nonpartisan government entity that serves Congress and is run by the Library of Congress. The summary is taken from the official website THOMAS.

10/4/2007--Passed House amended.

Mortgage Forgiveness Debt Relief Act of 2007 - Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence. Limits to $2 million the excludable amount of such indebtedness. Reduces the basis of a principal residence by the amount of discharged indebtedness excluded from gross income. Disallows an exclusion for a discharge of indebtedness on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer. Sets forth rules for determining the allowable amount of the exclusion for taxpayers with nonqualifying indebtedness and who are insolvent.

Extends through 2014 the tax deduction for mortgage insurance premiums.

Sets forth alternative tests for qualifying as a cooperative housing corporation for purposes of the tax deduction for payments to such corporations. Qualifies a corporation if: (1) 80% or more of the total square footage of the corporation's property is used or available for use by its tenant-stockholders for residential purposes, or (2) 90% of the corporation's expenditures are for the acquisition, construction, management, maintenance, or care of its property for the benefit of the tenant-stockholders.

Limits the exclusion from gross income of gain from the sale of a principal residence by denying an exclusion of the gain that is allocable to a nonqualified use of such residence (i.e., use other than as a principal residence).

Amends the Tax Increase Prevention and Reconciliation Act of 2005 to increase to 116.75% the estimated tax rate in the third quarter of 2012 for corporations with assets of not less than $1 billion.

[Moe Bedard]

Yup! All we need is for it to pass the Senate and we are golden. Bush has mentioned that in his speech today on the economy, that is asking congress to pass it ASAP. So we still have sometime to go, but this is definitely a great sign and step forward for homeowners!!!