Bill > S1512

This bill aims to provide relief for mortgage debt by allowing taxpayers to exclude from their gross income the income attributable to the discharge of debt on their principal residence, including debt reduced through mortgage restructuring or forgiven in connection with a foreclosure. The bill places certain conditions and limitations, such as capping the eligible forgiven debt at $2 million ($1 million for married filing separately), applying only to "acquisition indebtedness" (as defined in the Internal Revenue Code), and requiring the excluded amount to be used to reduce the taxpayer's Massachusetts basis in the principal residence. The bill also specifies that the principal residence exclusion takes precedence over an insolvency exclusion, unless elected otherwise, and defines "principal residence" as per the Internal Revenue Code. The provisions of the bill are applicable to discharges of indebtedness on or after January 1, 2013, and the commissioner is required to promulgate regulations to effectuate the bill.

Budget and Finance

https://malegislature.gov/Bills/190/S1512