The House Committee on Ways and Means has unanimously approved a measure that would revise how the tax code treats mortgage debt forgiveness, as well as make the current temporary tax deduction for private mortgage insurance permanent. Under current law, debt forgiven following mortgage foreclosure or renegotiation is considered income for tax purposes, resulting in tax liability for individuals and families. H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007, will now head to the U.S. House of Representatives for consideration. “Families dealing with the pain of a foreclosure should not have the double whammy of a large tax bill for terminating their mortgage through no fault of their own,” said Ways and Means Committee Chairman Charles B. Rangel. “I am pleased the Committee joined together to unanimously pass this critical legislation and I look forward to bringing this measure before the full House.” Click here for a summary of the proposed legislation.

More: