Bill > SB30

This bill amends Section 17144.5 of California's Revenue and Taxation Code to adjust tax rules related to the cancellation of mortgage debt, specifically for homeowners facing financial distress. It modifies how the Internal Revenue Code's provisions on debt cancellation are applied, essentially allowing a larger amount of forgiven mortgage debt to be excluded from taxable income, with a cap of $500,000 for individuals or $250,000 for married individuals filing separately. The bill also incorporates changes from federal legislation, the American Taxpayer Relief Act of 2012, and clarifies that these provisions apply to debt discharges occurring on or after January 1, 2007, and specifically on or after January 1, 2013, for certain amendments. Importantly, it states that no penalties or interest will be due for forgiven qualified principal residence indebtedness during the 2007 or 2009 tax years, even if not reported on the tax return, and the act is declared urgent to provide immediate tax relief to homeowners.