• Home
  • Bankruptcy in Brief
  • ABC’s of Bankruptcy
  • Considering Bankruptcy
  • True Stories
  • Chapter 13
  • Blog
  • About
  • TOC

Northern California Bankruptcy Lawyer

On The Bankruptcy Soapbox

The Soap Box
  • How bankruptcy works
  • Mortgage Matters
  • Consumer Rights
  • You & Your Lawyer
  • Small Business
  • Family Law

California aligns tax law on mortgage debt forgiveness with feds

By Cathy Moran

While the federal tax law carved out an exception to the tax on cancellation of debt income when it involved the taxpayer’s home, the state of California did not move to conform its tax law to federal law.  Those who lost their homes to foreclosure faced state taxes on the phantom income.

California conformed its law to the federal treatment of forgiveness of debt income this week.  At least California has moved away from kicking taxpayers when they are now.

Now if someone would enact an effective, balanced approach to mortgage modification that considers principal reduction.  Otherwise, I continue to advise clients to walk away from houses they will never be able to sell for enough to pay the mortgage.

More from the Soapbox

  • Take Credit For The Tax Deductions That Hide In Chapter 13Take Credit For The Tax Deductions That Hide In Chapter 13
  • We’re Now In Redwood CityWe’re Now In Redwood City
  • Foreclosure: The Unseen HazardsForeclosure: The Unseen Hazards
  • The Unexpected Loss When Tax Returns Filed LateThe Unexpected Loss When Tax Returns Filed Late
  • California Extends Protection For Home Loan BorrowersCalifornia Extends Protection For Home Loan Borrowers

Filed Under: Uncategorized

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

Bankruptcy Basics

About The Soapbox

You’ve arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said “try”).

Here, I allow myself to tell stories and express strong opinions. We dig deeper into how to consider bankruptcy and navigate a bankruptcy case.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

How Bankruptcy Works

The Biggest Lie About Bankruptcy

Read anything about Chapter 7 and you get, "Your possessions are sold in Chapter 7 bankruptcy." That is, flat out, the biggest lie about bankruptcy. It's a liquidation proceeding and your stuff will be sold to pay creditors, the lie goes on. No wonder people are scared off from getting relief from debts they … Read more

More Posts from this Category

643 Bair Island Road
Suite 403
Redwood City, CA 94063
Phone: (650) 694-4700
Phone: (650) 368-4700

Categories

All content copyright © Moran Law Group. All rights reserved.