4/9/2010 California Legislature approves tax brea…

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California Legislature approves tax break for L.A. Opera Ring Festival »
people in foreclosures, short sales
The measure, which is expected to be signed by Gov. Arnold Schwarzenegger, would waive
state taxes on mortgage debt that has been forgiven in a foreclosure or short sale.

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GRAPHIC: Tax bill's prov isions
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Thousands of Californians whose homes were foreclosed on
and bailout
or sold at a loss would get tax relief under a measure approved
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Thursday by the state Legislature.
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The bill would waive state taxes on mortgage debt that has
been forgiven in a foreclosure or short sale. It is expected to
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"The mortgage-debt tax relief provision in this bill will
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provide financial shelter for tens of thousands of Californians
No. 13 - The Fabulous Forum 04/09/2010, 12:14 p.m.
who have lost their hopes and dreams in the housing market
crash, and it's about time we gave these folks a helping hand," Tiger Woods' second round at the Masters: Hole
said state Sen. Ron Calderon (D-Montebello). No. 14 - The Fabulous Forum 04/09/2010, 12:09 p.m.
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The short-sale provision would mean about $34 million less video-game sounds - L.A. Unleashed 04/09/2010,
in tax revenue for the state over three years, according to the 12:02 p.m.
Franchise Tax Board.
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04/09/2010, 11:53 a.m.
money. Under the bill approved Thursday, California would provide similar relief.

Other parts of the measure, SB 401 by Sen. Lois Wolk (D-Davis), were called tax increases by
Republicans. Even though they supported the tax-relief element, several GOP members of the Senate
and Assembly voted against the bill, which was opposed by the Howard Jarvis Taxpayers Assn.

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4/9/2010 California Legislature approves tax brea…
The Republicans objected to a provision that would reduce deductions for charitable gifts, and to
changes that would allow the state to tax more income earned by minor dependents.

The changes would also make it harder to qualify a home as a principal residence for purposes of
escaping capital gains taxes when the property is sold, and some penalties and interest charges to
corporations would be increased, according to Therese M. Twomey, a principal consultant for the
Senate Republican Policy Office.
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These changes would bring in more than $10 million in new revenue over five years, Twomey said.
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Mobile » Ev en ts »
"It's an issue of fairness," said Sen. George Runner (R-Lancaster). "You are giving money to one
group of people and taking it away from another group of people."
Su bscr ibe » E-Edition » New s-
With the plunge in the real estate market, many Californians have found themselves owing much lett er s »
more on their mortgages than their homes are worth. Some have been foreclosed upon or asked their
lender to approve a short sale, in which a home is sold for less than the debt, some of which is waived.

The amount waived has been considered taxable income under California law. The measure passed
Thursday would eliminate that tax when a bank agrees to accept less than what is owed on a home. MOST VIEWED MOST E-MAILED

The governor vetoed a similar bill last month because it included a provision, since removed, that Justice John Paul Stevens announces his
would have increased penalties against businesses and wealthy individuals who abuse tax credits. retirement
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Business groups including the California Chamber of Commerce and Western States Petroleum Assn. teams, completes 57 of 59 passes
complained that the provision would have made businesses reluctant to claim the tax breaks for fear
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of making a costly error. The businesses also said California's tax penalties were already tougher than
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The new measure would lift a great burden from the shoulders of Valarie Wood and her husband, who
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were facing a $10,000 state tax bill on debt that was forgiven in a short sale of their property in
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Health problems and a "mortgage gone awry" forced the couple to renegotiate their loan with their
bank, which agreed to waive about $300,000 of debt on the house and property, Wood said. Sex abuse suit is filed in Texas diocese supervised
by L.A.'s incoming archbishop
"We've lost our dream home. We are in our 60s, and it was going to be our retirement," she said, her
voice choking with emotion. "This bill is crucial for people like us. We are extremely relieved."

Schwarzenegger said during a news conference Thursday that he wants to give homeowners and
businesses "the relief they need."

"We want to be helpful in every way we can, so we will sign it," he said.

patrick.mcgreevy@latimes.com
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Comments (6) Add / View comments

Shagdaddi at 7:30 PM April 08, 2010

Smokey and Vivien I agree! Where is the reward for being responsible and paying
your bills? I at least feel there should be an audit and if they pulled ANY money out
on a second to buy ANY luxury items they should not qualify for a tax break. I am
starting to think it is WAY more rewarding to be irresponsible, frivilous and greedy.
This IS WRONG,WRONG, WRONG! So our state legislature should pass it by a huge
majority...

mr. gittes at 6:49 PM April 08, 2010

"

Legislature approves tax break for people in foreclosures, short sales"

i assume the state is being reimbursed with Bernanke bucks....

smokey2706 at 5:25 PM April 08, 2010

This is absolutely insane. Don't get me wrong, I do have compasion for those who
have lost their jobs, but for all of those no-document realestate loans and the
speculators they must be held financially responsible.

The State of California is already 20 plus billion short for the upcoming budget year.
This new program adds 30 plus million over thre years. Our California leaders are
worse than my teanagers whern it comes to how to budget you income. This is a real
tragety for all of the honest people in California who pay their bills on time.

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