Discharge of Debt Before January 1, 2014 for Certain Principal Residences Is Not Taxable

The American Taxpayer Relief Act of 2012, the recent fiscal cliff legislation (the "Act"), provides good news for many individuals considering foreclosures or foreclosure alternatives.  The Act extends the time by which discharge of "qualified principal residence indebtedness" ("QPRI") under Section 108(a)(1) remains excluded from gross income.  See Title II, Section 202 of the Act.  The exclusion from gross income now applies if QPRI is discharged before January 1, 2014.  Under the earlier Section 108(a)(1), the exclusion only applied to QPRI that was discharged before January 1, 2013. Want to further discuss these issues?  Feel free to contact me at 954-944-3929 or nrumbak@rumbaklaw.com.