Conformity to federal mortgage relief moving along

SB 1055 (Machado and Correa), California’s version of IRC §108 mortgage relief, passed its first hurdle on February 13, 2008, but not before the Senate Revenue and Taxation Committee virtually killed any hopes of full conformity to the mortgage relief provision in the federal Mortgage Forgiveness Debt Relief Act of 2007. (P.L. 110-142) 

The authors accepted the committee’s amendments to reduce the relief cap from $2 million ($1 million for married filing separate filers) to $1 million ($500,000 for married filing separate filers). The bill already was already out of synch with the federal operative dates, covering relief for discharges on or after January 1, 2007, and before January 1, 2010. The last day of relief for discharges under SB 1055 is December 31, 2008.

SB 1055 does not address other provisions of the federal bill, including relief for surviving spouses.