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Mortgage Debt Relief at last!.

Governor Schwarzenegger signed SB 401 (Wolk) into law on Monday.  This bill aligns the state’s treatment of forgiven debt with that of the Federal government.

What it means is that distressed owners that are forced into foreclosure or a short sale will not be taxed on the difference between the sales price and the original loan amount.  Or, as the author of the article so succinctly sums it:

“the Franchise Tax Board will NOT be meaner than the IRS”