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| 2 | 2 | | SENATE DOCKET, NO. 1508 FILED ON: 1/16/2025 |
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| 3 | 3 | | SENATE . . . . . . . . . . . . . . No. 2039 |
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| 4 | 4 | | The Commonwealth of Massachusetts |
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| 5 | 5 | | _________________ |
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| 6 | 6 | | PRESENTED BY: |
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| 7 | 7 | | Mark C. Montigny |
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| 8 | 8 | | _________________ |
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| 9 | 9 | | To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General |
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| 10 | 10 | | Court assembled: |
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| 11 | 11 | | The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill: |
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| 12 | 12 | | An Act relative to the relief of mortgage debt. |
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| 13 | 13 | | _______________ |
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| 14 | 14 | | PETITION OF: |
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| 15 | 15 | | NAME:DISTRICT/ADDRESS :Mark C. MontignySecond Bristol and Plymouth 1 of 2 |
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| 16 | 16 | | SENATE DOCKET, NO. 1508 FILED ON: 1/16/2025 |
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| 17 | 17 | | SENATE . . . . . . . . . . . . . . No. 2039 |
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| 18 | 18 | | By Mr. Montigny, a petition (accompanied by bill, Senate, No. 2039) of Mark C. Montigny for |
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| 19 | 19 | | legislation relative to the relief of mortgage debt. Revenue. |
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| 20 | 20 | | [SIMILAR MATTER FILED IN PREVIOUS SESSION |
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| 21 | 21 | | SEE SENATE, NO. 1879 OF 2023-2024.] |
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| 22 | 22 | | The Commonwealth of Massachusetts |
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| 23 | 23 | | _______________ |
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| 24 | 24 | | In the One Hundred and Ninety-Fourth General Court |
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| 25 | 25 | | (2025-2026) |
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| 26 | 26 | | _______________ |
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| 27 | 27 | | An Act relative to the relief of mortgage debt. |
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| 28 | 28 | | Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority |
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| 29 | 29 | | of the same, as follows: |
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| 30 | 30 | | 1 SECTION 1. Section 2 of chapter 62 of the General Laws, as appearing in the 2022 |
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| 31 | 31 | | 2Official Edition, is hereby amended by inserting after the word “lender” in line 213 the following |
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| 32 | 32 | | 3subparagraph:- |
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| 33 | 33 | | 4 (S) To the extent not otherwise excluded from gross income, in whole or in part, income |
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| 34 | 34 | | 5attributable to the discharge of debt on a principal residence, including debt reduced through |
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| 35 | 35 | | 6mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, |
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| 36 | 36 | | 7subject to the following conditions and limitations: |
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| 37 | 37 | | 8 (i) No more than $2,000,000 of forgiven debt is eligible for the exclusion under this |
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| 38 | 38 | | 9section, or $1,000,000 in the case of married filing separately for the purposes of federal taxes. 2 of 2 |
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| 39 | 39 | | 10 (ii) This section shall only apply to “acquisition indebtedness” as defined in section |
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| 40 | 40 | | 11163(h)(3)(B) of the Code. |
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| 41 | 41 | | 12 (iii) The amount excluded from gross income by reason of this section shall be applied to |
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| 42 | 42 | | 13reduce, but not below zero, the Massachusetts basis of the principal residence of the taxpayer. |
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| 43 | 43 | | 14 (iv) This section shall not apply to the discharge of a loan if the discharge is on account |
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| 44 | 44 | | 15of services performed for the lender or any other factor not directly related to a decline in the |
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| 45 | 45 | | 16value of the residence or to the financial condition of the taxpayer. |
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| 46 | 46 | | 17 (v) If any loan is discharged, in whole or in part, and only a portion of such loan qualifies |
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| 47 | 47 | | 18under this section, this section shall apply only to so much of the amount discharged as exceeds |
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| 48 | 48 | | 19the amount of the loan, as determined immediately before such discharge, which does not |
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| 49 | 49 | | 20qualify. The principal residence exclusion shall take precedence over an insolvency exclusion |
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| 50 | 50 | | 21unless elected otherwise. |
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| 51 | 51 | | 22 (vi) For the purposes of this section, the term “principal residence” shall have the same |
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| 52 | 52 | | 23meaning as in section 121 of the Code. |
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| 53 | 53 | | 24 SECTION 2. This act shall apply to discharges of indebtedness on or after January 1, |
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| 54 | 54 | | 252013. |
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| 55 | 55 | | 26 SECTION 3. The commissioner shall promulgate regulations to effectuate this provision |
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| 56 | 56 | | 27within 180 days of the effective date of this act. |
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