House Passes One-Year Extension of Mortgage Debt Forgiveness Tax Relief
On Dec. 3, 2014, the House of Representatives passed H.R. 5771, the Tax Increase Prevention Act of 2014, by a strong bipartisan vote of 378-46. The Senate has not yet acted on the tax extenders, but is expected to do so the week of Dec. 8. Please visit the Mortgage Debt Cancellation Relief page on realtor.org for any developments in the coming week.
The House bill includes a one-year extension of several expired tax provisions that benefit REALTORS and their clients, including tax relief for mortgage debt forgiveness. The relief is effective retroactive to Jan. 1, 2014, but expires again in just a few weeks, on Dec. 31, 2014. Also included in the bill are one-year extensions of the 15-year depreciation schedule for leasehold improvements, the deduction of mortgage insurance premiums, and the deduction for energy efficient commercial buildings.
The House action came in the final days of the post-election “lame duck” session of Congress, and followed the breakdown of negotiations between Republicans and Democrats over a more robust bill that would have extended most of the 55 tax provisions that expired last Dec. 31 for two years and made several others permanent. A bipartisan agreement for this larger legislative deal seemed promising but was not final when the White House issued a veto threat on it because the overall package would not benefit enough lower-income taxpayers.
With time running out before the expected Dec. 11 adjournment of the Congress, House leaders put together H.R. 5771 as a last effort to prevent tax increases for many Americans for 2014.
While there are many in the Senate of both parties who are disappointed with only a one-year extension of the expired provisions, H.R. 5771 is likely to pass as the last best alternative to no tax extenders bill at all. The President has signaled that he will likely sign a one-year bill.