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Jeri Creson's Blog

By Jeri Creson | Broker in Studio City, CA
  • Something Smells in Sacramento....

    Posted Under: Schools in Los Angeles  |  April 5, 2010 9:44 AM  |  566 views  |  No comments

    On March 25th, Governor Swartzenegger vetoed a very important piece of legislation, SBX8 32.   This bill would provide that the state tax laws would match the Federal Mortgage Forgiveness Act in regard to debt relief through foreclosure or mortgage restructuring.   Under the current laws, the California exemptions that matched the Federal law expired in 2008.   For taxpayers in 2009 and forward who received debt relief through foreclosure, short sale or mortgage restructuring, although they may qualify to exclude that 1099 amount as income on their federal taxes - MAY FACE CALIFORNIA INCOME TAX.   Folks - this is very important here!   

    And here's the fishy part of this Veto:    According to the Bill Analysis, found here:

    http://info.sen.ca.gov/pub/09-10/bill/sen/sb_0001-0050/sbx8_32_cfa_20100212_141220_sen_floor.html

    The opposition to this bill is as follows: 

      ARGUMENTS IN OPPOSITION :    The opponents are concerned 
      with the erroneous refund penalty, asserting that the terms 
      of the penalty, such as "reasonable basis' and "excessive 
      amount" are undefined, that the penalty disproportionately 
      punishes taxpayers compared to the amount of noncompliance, 
      and that no reasonable caused exception exists, among other 
      arguments.  

    And the verified groups in opposition to this bill are:

    OPPOSITION
    :    (Verified  2/10/10)

      California Bankers Association
      California Chamber of Commerce
      California Taxpayers' Association
      California Manufacturers and Technology Association
      Tech America
      Western States Petroleum Association

    Did I miss something, or is the political opposition to this bill a group, primarily made up of special interests who have no stake whatsoever in the "STATED" reasons for opposition.   Is it just me, or does that smell fishy to you too?   No, folks - the actual (vs the stated) opposition, and reason for our "Governator" to veto this very important bill comes from a not so politically correct position.   Apparently, in the attempt to balance the budget, our Governor would prefer to see the taxpayers who have already lost their homes...in a large part due to irresponsible banking practices, be the ones to take a further hit and pay taxes on the debt relief for a mortgage they couldn't afford to pay.    Remember -NONE of this proposed relief is for the 2nd mortgages taken out where the money was spent on other things.   This is ONLY relief for the debt that was used to obtain the property or substantially improve it.  

    Shame...shame...SHAME on you Governor.    Our legislature did their job, created, voted on and presented you this bill.  Please tell us exactly what grand benefit was gained by throwing hard working Californians under the bus this time? 

    This is the 3rd attempt to get this vital piece of tax legistation passed.  The Governor seems vehemently opposed to it though.  
    There are 2 other bills currently waiting to address this.  PLEASE take action and let's put pressure on Sacramento, and the Governors office in particular to enact legislation that will protect the homeowners who lost their homes due to foreclosure.    AB 1779 and SBX6 14

    IMHO -
 
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