Wednesday, February 11, 2015

Home loan forgiven? It may count as income

The debate in the N.C. Senate Wednesday was on what's been called the "gas tax bill." Whether it cuts the tax (as Republicans say) or raises it (as Democrats say) depends on how you look at it. But another part of the bill appears to be more clear. It's one that could affect thousands of N.C. homeowners.

A section of the bill dealing with income tax changes would require taxpayers to count as income any portion of their mortgage indebtedness forgiven by a lender.

Take somebody who owed $200,000 on a home and had been caught up in the mortgage meltdown. Say the lender forgave $50,000 of the loan. Under the bill, that $50,000 would be counted as taxable income in North Carolina. The Internal Revenue Service would not count it.

Democratic Sen. Joel Ford of Charlotte tried to remove it from the bill, and leave state law conform to federal law.
"We should provide the same tax relief to North Carolina taxpayers and put more money in pockets," he said. "Not conforming to the federal law on this amounts to kicking a person when they're down.”
For procedural reasons, Ford's proposed amendment never came up for a vote.
Democrats say up to 4,000 people could be affected. Legislative staffers estimate the change would result in $14 million in revenue for the state.
The Senate tentatively passed the bill 36-14 along part lines. Final approval is expected Thursday before it would head to the House.
Republicans say the gas tax bill, by the way, would ensure money for road building and maintenance. By setting a floor for the tax (35-cents a gallon) it would result in another $352 million for roads over five years.    


Anonymous said...

So, you increase gas tax revenue by cutting the gas tax rate?

What was it George H W Bush said about 'voodoo economics'?

DynaSteve said...

I thought Republicans were against raising taxes. Or only if its mostly going to hit the poor & middle class, then its ok? And B.S on the loan forgiveness as income!? Are they looking to just put more people into Debtors prison? Time to grab the muskets, remind them of why this country was founded!!

elite games said...

can't believe a dem-o doesn't want to tax something. Give me a $50K cut on my mortgage and I'll gladly pay the tax incurred. Seems like those that got that deal should have never bought a house in the first place or didn't read the fine print of their loan.

and yes, Steve, we do need to grab the muskets and march on D.C. to remind them of our heritage.

Larry said...

This is the same observer which champions anything to do with any rail, street car or flying machine (you know they will champion, helicopters and planes, as long as the tax payers pay for them).

Yet they do jump on this rise in taxes for roads.

And then to make sure you know how socialist they are, they want to help folks walk away from bad decisions and leave the common tax payers holding the bill for doing things right.

What is it about the observer that makes them what they are, I mean did they not see the results of the last election.

Anonymous said...

....and you dems can't figure out why this country is broke???? Debt is forgiven and now you want even more out of it. Yeah, why should you have to count it as income?? That's discrimination by the evil Republicans, right?

stormlover24 said...

You can't squeeze but so much blood out of the turnip sooner or latter you have to tax the rich because they will be the only ones with any money. And all you 100,000-200,000 will be next

David P. McKnight said...

Indebtedness reductions should not be designated as income.