The President comes through (for once)!
Hooray!
I'll be honest: there's not much I like about the current occupant in the White House, but his concern for his legacy is driving him to some unprecedented activity. Among that activity, and very welcome from my point of view, is the legislation the President pushed to get rid of the tax on forgiven loan money.
It used to be that if you had to sell your house short, that is, you sold your house for less than what you owed your lender, you had two choices. You could either cough up the difference yourself or, what occured more often, you could walk away. In that case, the lender would send you (and the IRS) a form letting you know that the difference between what you owed and what they accepted would be considered taxable income on your part. The idea was that the lender basically "gave" you that amount of money, and the IRS would tax you on it. Ouch. Especially when short sales basically happen only to people who are losing their homes and can't even afford to make their monthly mortgage payments, much less a tax on money they've never seen.
So, as hard as it is for me to believe it's coming from my pen, KUDOS to President Bush for helping to push this legislation through. Life will be much easier for some of our unfortunate fellows who are having a tough enough time as it is without having to pay a tax on "phantom" income.