Health Insurance Reform Questions

The Exchange would be open to those who currently purchase insurance in the individual market. This group would include, for example, early (pre-Medicare eligible retirees), the self-employed, individuals whose employers do not provide insurance, or those who cannot affor Read the rest of this entry

Popularity: 5% [?]

A key provision of the Acts’ insurance reforms is the creation of “Exchanges.” The Exchanges would be state based and serve as an aggregator of individual policies sold by private insurers and underwritten using the new federal underwriting and rating rules spelled out by the Acts. The Small Business Health Options Program (SHOP) would Read the rest of this entry

Popularity: 5% [?]

NO MORE STATE TAX ON FORGIVEN DEBT

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.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board’s Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service’s Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.

Brought to you by the California Association Of Realtors

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The provisions of “the Patient Protection and Affordable Care Act” can be quite daunting to sift through. We are going to take the time to talk about specific questions that most people are having concerning this landmark legislation. The biggest question is, How will people get insurance through this reformed health insurance system? Read the rest of this entry

Popularity: 8% [?]