I haven’t had time to fully evaluate this bill, but my very preliminary thoughts are as follows:
The bill appears to specifically encompass “acquisition indebtedness” only; therefore, it appears that loans taken to purchase the oft-cited Hummer, European vacation, yacht, etc, may not be excluded from cancellation of debt taxation.
The bill does not provide for a free-pass from recourse debt as it does not appear to restrict a lender from pursuing a deficiency judgment. It appears to be a tax bill only. And it’s not a free-pass re taxation, as described above.
At first blush this bill appears to be most favorable to those with considerable assets – ie, those who would not be found insolvent at the time of foreclosure/short sale. Those who are insolvent are already protected from cancellation of debt taxation, so this bill appears to have no relation to them.
I look forward to actually digging into this bill (after much Christmas shopping) and seeing all the fine print.
