Last week the Governor vetoed the state bill which make California tax law the same as the federal government in forgiving mortgage debt for those who sell their homes for less than the they owe on their home due to the junk attached to the bill. Another example of our great government at work. The California Association of Realtors is working on two stand alone bills to reinstate this tax relief which expired some time ago.
Governor Schwarzenegger last week vetoed a bill that would have prevented California homeowners who sold their homes via short sales or received loan modifications in 2009 from being taxed on the forgiven mortgage debt. Schwarzenegger vetoed the bill, which would have aligned much of the state’s tax code with that of the federal government’s, because it contained an unrelated provision regarding tax refunds for the state’s largest businesses. Although the governor vetoed this particular bill, he expressed his support for banning taxation of forgiven mortgage debt, and immediately called for the legislature to send him a bill to provide tax forgiveness prior to the April 15 tax-filing deadline. From the California Association of Realtors Newsline