TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, March 21, 2012

The Injustice of Not Taxing Forgiven Mortgage Debt

Bradford P. Anderson (California Polytechnic State University), Robbing Peter to Pay for Paul's Residential Real Estate Speculation: The Injustice of Not Taxing Forgiven Mortgage Debt, 36 Seton Hall Legis. J. 1 (2011):

Part 1 of this Article examines the discharge of indebtedness as a form of income that should be taxed. Part 2 evaluates the so-called “mortgage meltdown” and the resultant legislation providing a windfall to those who benefit from non-payment of mortgage debt. Part 3 analyzes the public policy and ethical issues associated with the tax-free windfall under the Mortgage Forgiveness Debt Relief Act of 2007 ("MoFoDRA"). Part 4 proposes practical and equitable solutions to the disparate treatment and inequities from the tax exemption contained in MoFoDRA.

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This was a good study. I'm surprised that it didn't receive some comments. Of course, we know that the reason for not taxing mortgage forgiveness had everything to do with politics and not justice.

Posted by: Woody | Mar 23, 2012 11:37:19 AM