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Article: On Deadline.
- Article from:
- Banking Wire
- Article date:
- January 1, 2008
CopyrightCOPYRIGHT 2008 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Congress Moves To Protect Forgiven Debt
WASHINGTONCongress passed legislation last week to protect mortgage borrowers from having to pay taxes on debt forgiven in a bankruptcy or restructuring, which is expected to prompt an increase in bankruptcy filings among troubled homeowners. The bill will spare homeowners for three years from taxes as high as 35% on canceled mortgage debt. Under current law, any forgiven mortgage debt is taxable as income.
Homeowners who restructure their mortgages to avoid foreclosure should not be hit with a tax bill as a result, Treasury Secretary Henry Paulson said. This legislation will temporarily exclude homeowners who have ...