Massachusetts S2039 amends state tax law to exclude up to $2 million of forgiven mortgage debt on a principal residence from gross income.
Massachusetts S2039 modifies state tax law to exclude up to $2 million of forgiven mortgage debt on a principal residence from gross income, subject to certain conditions. This exclusion applies to mortgage debt forgiven in connection with a foreclosure or through mortgage restructuring. The exclusion is limited to "acquisition indebtedness" as defined in federal tax law. The bill also specifies that the exclusion reduces the Massachusetts basis of the principal residence. The exclusion takes precedence over an insolvency exclusion unless elected otherwise.
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