Wall Street Journal (06/17/08) P. D3; Dale, Arden
Several organizations, including the National Fair Housing Alliance, are banding together to lobby lawmakers to expand the tax breaks offered under the Mortgage Forgiveness Debt Relief Act of 2007. In a letter to key members of the Senate Finance and the House Ways and Means committees, the consortium is requesting tax breaks for homeowners who obtain cash-out refinances to cover medical and education expenses, among other non-home costs. Supporters believe the move would help cash-strapped families avoid foreclosure by eliminating hefty tax bills, since current law taxes all forgiven debt except for that used to buy or upgrade a home. Forgiven debt for 2007, 2008 and 2009 up to $2 million for joint filers and $1 million for individual filers is exempt from income taxes under the new Act; however, some say the law does not go far enough. "It's ironic if on one hand the Fed is saying 'modify these loans by reducing principal,' and then we're going to hit the borrower with a large tax bill right when they're most vulnerable," says Chapman University law school professor Kurt Eggert.
Thursday, June 19, 2008
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