Bill Text: CA AB99 | 2015-2016 | Regular Session | Enrolled

---

Bill Title: Personal income taxes: income exclusion: mortgage debt forgiveness.

Spectrum: Bipartisan Bill

Status: (Vetoed) 2016-01-15 - Consideration of Governor's veto stricken from file. [AB99 Detail]

Download: California-2015-AB99-Enrolled.html

---

BILL NUMBER: AB 99	ENROLLED
	BILL TEXT

	PASSED THE SENATE  SEPTEMBER 1, 2015
	PASSED THE ASSEMBLY  JUNE 1, 2015
	AMENDED IN ASSEMBLY  MAY 20, 2015
	AMENDED IN ASSEMBLY  FEBRUARY 18, 2015

INTRODUCED BY   Assembly Member Perea
   (Coauthor: Senator Cannella)

                        JANUARY 8, 2015

   An act to amend Section 17144.5 of the Revenue and Taxation Code,
relating to taxation, and declaring the urgency thereof, to take
effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 99, Perea. Personal income taxes: income exclusion: mortgage
debt forgiveness.
   The Personal Income Tax Law provides for modified conformity to
specified provisions of federal income tax law relating to the
exclusion of the discharge of qualified principal residence
indebtedness, as defined, from an individual's income if that debt is
discharged after January 1, 2007, and before January 1, 2014, as
provided. The federal Tax Increase Prevention Act of 2014 extended
the operation of those provisions to debt that is discharged before
January 1, 2015.
    This bill would conform to that federal extension, discharge
indebtedness for related penalties and interest, and make legislative
findings and declarations regarding the public purpose served by the
bill.
   This bill would declare that it is to take effect immediately as
an urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17144.5 of the Revenue and Taxation Code is
amended to read:
   17144.5.  (a) Section 108(a)(1)(E) of the Internal Revenue Code,
is modified to provide that the amount excluded from gross income
shall not exceed $500,000 ($250,000 in the case of a married
individual filing a separate return).
   (b) Section 108(h)(2) of the Internal Revenue Code, is modified by
substituting the phrase "(within the meaning of section 163(h)(3)
(B), applied by substituting '$800,000 ($400,000' for '$1,000,000
($500,000' in clause (ii) thereof)" for the phrase "(within the
meaning of section 163(h)(3)(B), applied by substituting '$2,000,000
($1,000,000' for '$1,000,000 ($500,000' in clause (ii) thereof)"
contained therein.
   (c) This section shall apply to discharges of indebtedness
occurring on or after January 1, 2007, and, notwithstanding any other
law to the contrary, no penalties or interest shall be due with
respect to the discharge of qualified principal residence
indebtedness during the 2007 or 2009 taxable year regardless of
whether or not the taxpayer reports the discharge on his or her
return for the 2007 or 2009 taxable year.
   (d) (1) The amendments made by Section 202 of the American
Taxpayer Relief Act of 2012 (Public Law 112-240) to Section 108 of
the Internal Revenue Code shall apply.
   (2) The changes made to this section by Chapter 152 of the
Statutes of 2014 shall apply to discharges of indebtedness that occur
on or after January 1, 2013, and before January 1, 2014, and,
notwithstanding any other law, no penalties or interest shall be due
with respect to the discharge of qualified principal residence
indebtedness during the 2013 taxable year, regardless of whether the
taxpayer reports the discharge on his or her income tax return for
the 2013 taxable year.
   (e) (1) The amendments made by Section 102 of the Tax Increase
Prevention Act of 2014 (Public Law 113-295) to Section 108 of the
Internal Revenue Code shall apply.
   (2) The changes made to this section by the act adding this
paragraph shall apply to discharges of indebtedness that occur on or
after January 1, 2014, and before January 1, 2015, and,
notwithstanding any other law, no penalties or interest shall be due
with respect to the discharge of qualified principal residence
indebtedness during the 2014 taxable year, regardless of whether the
taxpayer reports the discharge on his or her income tax return for
the 2014 taxable year.
  SEC. 2.  The amendments made by this act that conform to the
amendments made by Section 102 of the Tax Increase Prevention Act of
2014 (Public Law 113-295) to Section 108 of the Internal Revenue
Code, apply to qualified principal residence indebtedness that is
discharged on and after January 1, 2014, and before January 1, 2015.
The Legislature finds and declares that the amendments made by this
act and the retroactive application contained in the preceding
sentence are necessary for the public purpose of conforming state law
to the amendments to the Internal Revenue Code as made by the Tax
Increase Prevention Act of 2014 (Public Law 113-295), thereby
preventing undue hardship to taxpayers whose qualified principal
residence indebtedness was discharged on and after January 1, 2014,
and before January 1, 2015, and do not constitute a gift of public
funds within the meaning of Section 6 of Article XVI of the
California Constitution.
  SEC. 3.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to provide tax relief to distressed homeowners at the
earliest possible time, it is necessary that this act take effect
immediately.