House passes tax-relief bill for refinancing borrowers

In an attempt to help homeowners stuck with unaffordable loans, the House on Thursday overwhelmingly approved legislation to ensure that borrowers who refinance their mortgages do not get taxed on the loss of value in their home.

{mosads}“It is just not right or fair that families struggling through a foreclosure would then face a tax bill in addition to losing their homes when they have seen no increase in their net worth,” Ways and Means Committee Chairman Charles Rangel (D-N.Y.) said. “This bill rights that wrong and provides tax relief to millions of American families.”

Said House Majority Leader Steny Hoyer (D-Md.): "This important legislation — the Mortgage Forgiveness Debt Relief Act — is yet another concrete example of how this Democratic House majority is focused on common-sense, bipartisan solutions and working to address the priorities of the American people.”

The legislation passed the House 386-27. The Bush administration supports the measure, although it argues that the tax relief should be temporary rather than permanent.

Sen. Debbie Stabenow (D-Mich.) has introduced similar legislation in the Senate, which has attracted some Republican support.

Sen. Max Baucus (D-Mont.), who heads the Finance panel, is reviewing the legislation but has not announced any plans yet, according to a Baucus aide.