Community news

NO MORE STATE TAX ON FORGIVEN DEBT

Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification.  Enacted into law yesterday, Senate Bill 401 generally aligns California’s tax treatment of mortgage debt relief income with federal law.  For debt forgiven on a loan secured by a “qualified principal residence,” borrowers will now be exempt from both federal and state income tax consequences.  The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

“Qualified principal residence” indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence.  It includes both first and second trust deeds.  It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

The tax breaks apply to debts discharged from 2009 through 2012.  Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions.  Most notably, taxpayers who are bankrupt are exempt from debt relief income tax.  Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board’s Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service’s Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage.  The full text of Senate Bill 401 is available at www.leginfo.ca.gov.

Pleasanton Soccer

Soccer in Pleasanton.

Mens soccer is alive and kicking in Pleasanton and the skills and drama of the beautiful game can be seen weekdays at Pleasanton sports park lunchtime when a bunch of slow and overwight guys still think they can play like Ronaldo. Pleasanton also has a healthy coed league which plays on Sunday.

Soccer in Livermore.

If you happen to be in the Livermore area there is a pick up game Tue/Wed/Thur/Fri, at the Vasco rd sports field near Lawrence Livermore Lab. Starts @ Noon.

Lawrence Livermore National Laboratory.

Q. We are moving to the area next month from Texas and are interested in buying a home in Livermore, however we are concerned about Livermore Lab. What is the impact of its activities to the area, have there been any problems?

(name withheld)

I received this email last week. It is a question I am asked all the time.

It’s definitely something to consider. LLNL does have some activity that does not lend itself to some peoples liking. However I can say that in 20+ years of selling homes around the lab, only once has a buyer had an issue. On that day when I showed a property across the street from llnl, a demonstration was being held. This upset the buyer who decided that noise and traffic from the folks marching, were too much and they decided to buy in another part of town.

LLNL has a liason officer whose function is to provide information to the public, potential buyer or otherwise. Many times I have referred people to this service and it seems to be useful and informative.  I can definitely say that location to the lab has in no way affected either price appreciation nor desirability in any way and that in fact many lab employees are happy to be able to walk or cycle to work.

Tha

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