HOUSE DOCKET, NO. 3889        FILED ON: 1/18/2019

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2550

 

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

Elizabeth A. Malia

_________________

To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relieving mortgage debt.

_______________

PETITION OF:

 

Name:

District/Address:

Date Added:

Elizabeth A. Malia

11th Suffolk

1/17/2019

Bud L. Williams

11th Hampden

2/1/2019

Peter Capano

11th Essex

2/1/2019

Mike Connolly

26th Middlesex

1/28/2019

Sal N. DiDomenico

Middlesex and Suffolk

1/31/2019

Mindy Domb

3rd Hampshire

1/30/2019

Michelle M. DuBois

10th Plymouth

1/30/2019

James B. Eldridge

Middlesex and Worcester

1/31/2019

Carlos González

10th Hampden

2/1/2019

Patricia D. Jehlen

Second Middlesex

2/1/2019

Mary S. Keefe

15th Worcester

1/31/2019

Kay Khan

11th Middlesex

2/1/2019

Jack Patrick Lewis

7th Middlesex

2/1/2019

Joseph W. McGonagle, Jr.

28th Middlesex

2/1/2019

Denise Provost

27th Middlesex

1/24/2019

David M. Rogers

24th Middlesex

2/1/2019

José F. Tosado

9th Hampden

1/25/2019

Chynah Tyler

7th Suffolk

2/1/2019


HOUSE DOCKET, NO. 3889        FILED ON: 1/18/2019

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2550

By Ms. Malia of Boston, a petition (accompanied by bill, House, No. 2550) of Elizabeth A. Malia and others relative to treatment of debt on principal residences for tax purposes.  Revenue.

 

[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE HOUSE, NO. 3337 OF 2017-2018.]

 

The Commonwealth of Massachusetts

 

_______________

In the One Hundred and Ninety-First General Court
(2019-2020)

_______________

 

An Act relieving mortgage debt.

 

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Section 2 of chapter 62 of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by adding the following subclause:-

(R) To the extent not otherwise excluded from gross income, in whole or in part, income attributable to the discharge of a valid debt on a principal residence, including debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, subject to the following conditions and limitations:

(i) No more than $2,000,000 of forgiven debt is eligible for the exclusion under this section, or $1,000,000 in the case of married filing separately for the purposes of federal taxes.

(ii) This section shall only apply to “acquisition indebtedness” as defined in section 163(h)(3)(B) of the Code.

(iii) The amount excluded from gross income by reason of this section shall be applied to reduce, but not below zero, the Massachusetts basis of the principal residence of the taxpayer.

(iv) This section shall not apply to the discharge of a loan if the discharge is on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer.

(v) If any loan is discharged, in whole or in part, and only a portion of such loan qualifies under this section, this section shall apply only to so much of the amount discharged as exceeds the amount of the loan, as determined immediately before such discharge, which does not qualify. The principal residence exclusion shall take precedence over an insolvency exclusion unless elected otherwise.

(vi) For the purposes of this section, the term “principal residence” shall have the same meaning as in section 121 of the Code.

SECTION 2. This Act shall apply to discharges of indebtedness on or after January 1, 2013.

SECTION 3. The commissioner shall promulgate regulations to effectuate this provision.