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.

(Source: California Association of Realtors)

Please contact me with any questions you may have about short sales or foreclosures or about how this new law may impact you.

3440 Torlano Court is a beautiful home in the Ruby Hill community. It went into contract in just 18 days with several very strong offers presented.

The Pleasanton real estate market has been very active over the past few months, with many properties receiving multiple offers. Even in the high end market, like Ruby Hill, activity is picking up.

Are thinking about selling? Contact me for a complimentary market analysis and price evaluation of your home. Maybe it’s the right time for you to sell.

The company also ranked second-highest among home sellers in the study.

“We couldn’t be prouder. This is an achievement our associates have truly earned. It is the face-to face interaction and the relationships they build daily that has impacted this study and elevated Keller Williams Realty to another level in customer service,” said Mark Willis, CEO of Keller Williams Realty.

“Knowing that this study was conducted during the toughest times the market has seen shows that spirit and dedication can make an impact.”

The study was produced by J.D. Power and Associates to measure home buyers’ and sellers’ customer satisfaction. The results of the home-buying experience were determined by three factors including the agent, office and the package of additional services.

Wow! Beautiful 2733 Calle De La Loma  boasts 4 bedrooms and 2.5 baths and is located in a desirable central Pleasanton neighborhood within walking distance to tennis ans sports parks.

Gourmet kitchen and family room. Formal living and dining rooms with vaulted ceilings. Master suite with fireplace. Lush, private backyard and so much more.

Offered at $899,000.

2171 Goldcrest Circle is a gem!

Single story remodeled home with custom touches inside and out.

2 bedrooms and 1 bathroom with large, private backyard.

Close to Historic Downtown Pleasanton.

Offered at $375,00.

Open House on Sunday, 1/31 from 1pm-4pm or contact us for a private showing.