National Association of Attorneys General
Extend Tax Relief or Distressed Homeowners Could Face Tax Bill
Attorneys General Urge Congress to Act
Washington, DC---The National Association of Attorneys General (NAAG) today urged Congress to pass existing legislation that would extend tax relief for citizens who have mortgage debt canceled or forgiven because of financial hardship or a decline in housing values.
Forty-nine attorneys general and the federal government signed a National Mortgage Settlement in February requiring five of the nation’s largest banks to provide $17 billion in debt reduction and other relief to homeowners. Such programs help those who are fighting to keep their homes.
“We strongly urge Congress to extend this critical tax exclusion, which expires on December 31, 2012, so that distressed homeowners are not stuck with an unexpected tax bill or deterred from participating in this historic settlement,” reads the NAAG letter to congressional leadership, signed by 43 state and territorial attorneys general.
Unless Congress acts, all of the remaining debt relief to be provided under the National Mortgage Settlement, as well as other mortgage debt relief programs, will likely be considered taxable income. Language already exists in Section 112 of the Family and Business Tax Cut Certainty Act (S. 3521) to extend the tax relief.
The NAAG letter can be found here: http://www.naag.org/sign-on_archive.php
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The National Association of Attorneys General (NAAG), www.naag.org, was founded in 1907 to help Attorneys General fulfill the responsibilities of their office and to assist in the delivery of high quality legal services to the states and territorial jurisdictions.