| The bill Congress is considering is The Mortgage Forgiveness Debt Relief Bill of 2007. Proposed legislation would exclude from taxable income any debt forgiveness arising from the foreclosure of the taxpayer's personal residence. Also excluded in the proposal is debt forgiven in the write down of a personal residence mortgage by the lender. The debt forgiven must be acquisition indebtedness (refinance is OK to the extent of the exisiting acquisition indebtedness). The forgiveness of the equity debt (line of credit, hard money morgages, etc.) would still be taxable - unless used for substantial remodel of the personal residence. |
