Two huge relatively unreported stories are proving once and for all how easily the wealthy can crush the poor and middle class, with a lot of help from the do-nothing GOP congress. NY Times:
Outrage #1: Come tax time, JPMorgan Chase will be able to write off the $1.5 billion in debt relief it must give homeowners to satisfy the terms of a recent settlement. But the homeowners who receive the help will have to treat it as taxable income, resulting in whopping tax bills for many families who have just lost their homes or only narrowly managed to keep them.
I know, it’s almost too hard to believe, isn’t it? Just as bad…
Outrage #2: A tax exemption for mortgage debt forgiveness, put in place when the economy began to falter in 2007, was allowed to expire on Dec. 31, leaving hundreds of thousands of struggling homeowners in financial limbo there are still more than 6.4 million households underwater.
Typically, if someone lends you money and later says you do not have to pay it back, the I.R.S. counts the amount forgiven as income … (EXAMPLE) Eric Heil, 50, owes $250,000 on his mortgage, and has found a buyer willing to take the house for $150,000. The bank has agreed. But if Congress does not extend the exemption, he will be forced to count the $100,000 difference as income. That would mean a $28,000 tax bill, and Mr. Heil has no idea how he would afford it.