CA AB1779

Amends Section 17144.5 of the Revenue and Taxation Code to exclude qualified principal residence indebtedness from California taxable income when discharged between January 1, 2007 and January 1, 2013, conforming to federal law.

Applies Section 108 of the Internal Revenue Code as amended by the Mortgage Forgiveness Debt Relief Act of 2007 and the Emergency Economic Stabilization Act of 2008.

Waives penalties and interest for taxpayers who fail to report discharge of qualified principal residence indebtedness in their 2007 or 2009 tax returns.

Declares that the mortgage debt tax relief serves a public purpose and does not constitute a gift of public funds under the California Constitution.

Takes effect immediately as a tax levy.