CA AB1393

Extends California's income tax exclusion for discharged qualified principal residence indebtedness to cover discharges occurring before January 1, 2014, conforming to the federal American Taxpayer Relief Act of 2012.

Limits the exclusion amount to $500,000 ($250,000 for married individuals filing separately) and reduces the debt threshold for calculating the exclusion from $1,000,000 to $800,000.

Waives all penalties and interest on qualified principal residence indebtedness discharged during the 2007, 2009, and 2013 taxable years, regardless of whether taxpayers report the discharge on their returns.

Takes effect immediately as an urgency statute to provide tax relief to distressed homeowners.