Bill > S1838

This bill proposes to amend the Massachusetts General Laws to exclude from a taxpayer's gross income the income attributable to the discharge of a valid debt on a principal residence, including debt reduced through mortgage restructuring or forgiven in connection with a foreclosure. The exclusion is subject to certain conditions and limitations, such as a cap on the amount of forgiven debt eligible for exclusion and the requirement that the debt must be "acquisition indebtedness" as defined in the federal tax code. The bill also specifies that the amount excluded from gross income must be applied to reduce the taxpayer's Massachusetts basis in the principal residence, and it provides that the principal residence exclusion takes precedence over an insolvency exclusion unless elected otherwise. The bill applies to discharges of indebtedness on or after January 1, 2013 and requires the commissioner to promulgate regulations to effectuate the provision.

Budget and Finance

https://malegislature.gov/Bills/192/S1838