Patiently – I think I have a problem understanding your logic. This Tax break will allow all homeowners who are upside down to walk away harmless and start from a clean slate. Imagine the mountain of REOs and the downward pressure on prices! The lenders will be so screwed I can imagine the whole mortgage market practically shutting down! 40% down payment will become de rigeur in many markets.
Coming to your example; Your corp has LOANED you a Huge mortgage, right? You default; The Corp has a loss. It may take a writeoff. The seller of the house would have paid tax on it anyway (beyond 250K/500K residential exemption, if any). I don’t see a big problem. As long as the tax writeoff is accompanied by a foreclosure or bankruptcy entry on your credit, I don’t think I would begrudge your “good fortune”.
