I need to find a way to get the corporation's money into my own pocket while minimizing taxes.

Commendable idea – done legally.

Under the mortgage debt forgivess plan, the corporation gives me $1 million home equity loan.

I am not sure the proposed tax exemption on mortgage debt forgiveness covers HELOC?

I default. I still have $1 million and pay zero in income or payroll taxes. The corporation gets to deduct $1 million as an expense. Uncle Sam is the loser.

Obviously this is fraud. I am certain the tax exemption will skip HELOC for this reason.

This would work great for estate planning purposes as well to transfer wealth the next generation. Say I have $10 million I want to transfer to my heir free of estate taxes. I give him a $10 million mortgage on his POS house.

I think this will be prevented by putting a limit, say $417K, for the program.

He defaults, still has the $10 million but neither he nor I paid any estate tax.

Since it was a mortgage, the heir should not have the money. It should have gone to the sellers, unless fraud is involved.

Sure they can limit the amount to $10,000. But smart people will find a way to profit. I have a maid who makes $25k per year. Instead, I can just pay her $15k in salaray and give her $10k home equity loan. She defaults, keeps the $10k. The $10k in "effective compensation" is tax free. She pays no income taxes and I pay no payroll taxes. What a great deal!!!

Powerful reason why HELOC should not benefit from the program. I think the existing law also distinguishes between recourse loans and non-recourse loans for this reason. HELOCd people will have to rot in debtors hell all their life.