Oregon Mortgages

Tax Breaks for the Credit Crunch

The Tax writing panel in the house approved a bill that would help out some of the consumers that are facing foreclosure. Typically, Forgiven debt is looked at as income and thus to be taxed accordingly but the bill would not require consumers to claim that as income to avoid the taxes to help ease the issue.

Rep. Kevin Brady of Texas claims the change would punish those who had saved to purchase a second home. Rep. Sam Johnson also of Texas called it a “luxury tax on retirement homes.”

The Senate’s version relieves the tax for 3 years while the House’s version changes it to permanent. Currently if you live in your 2nd home for any 2 of the previous 5 years you get a tax relief and under the proposed change it would be tied to the amount of time it was your primary residence.

Really it just sounds like we’re moving the problem from one area to another, obviously the people with 2nd homes won’t be too thrilled about their tax break going down.