Obama Signs H.R. 5771
On Friday, December 19th, 2014, Obama signed H.R. 5771, The Tax Increase Prevention Act. This signing extends this act until December 31st, 2014. This measure that works to prevent tax increases allows for research and development credit and bonus depreciation for business owners. It also means over fifty tax extenders for individual taxpayers.
In particular, this act extends the tax break for whose mortgage debt was cancelled or forgiven this year. This tax break, however, will not greatly affect taxpayers in California, as purchase money debt is nonrecourse debt in California. (Purchase money debt is finance used to buy a principal residence or refinance the debt on such a purchase. Nonrecourse debt is debt backed by collateral, meaning the collateral can be seized if the borrower defaults but he or she will not be personally liable). In California, nonrecourse debt is excluded from income.
This signing does not carry over into 2015, and consequently people who have mortgage debt forgiven or cancelled in 2015 should seek professional guidance to ensure they file their taxes in line with the changing regulations this year. Ultimately, it is important for those with mortgages to stay up to date on these changes or seek industry experts to guide them through the process.
Are you looking for an expert to help you understand the real estate market in Southern California so you can maximize savings, get the greatest return on your real estate investment, and finally get into your dream home in 2015? If so, contact The Barr Team. Located in Irvine, we are a team of experts who can keep you looped in on the changing face of the real estate market. Do not wait to sell or buy your home; call us today!