CA AB2234

Extends California's state tax exclusion for discharge of qualified principal residence indebtedness to apply to debts discharged before January 1, 2017, or subject to written arrangements entered into before January 1, 2017

Applies the exclusion retroactively to indebtedness discharged between January 1, 2014, and January 1, 2016, with no penalties or interest due for 2014 and 2015 taxable years

Caps the excluded amount at $500,000 ($250,000 for married individuals filing separately)

Applies the federal Protecting Americans from Tax Hikes Act of 2015 amendments to Section 108 of the Internal Revenue Code to California law for taxable years beginning on or after January 1, 2014

Includes legislative findings declaring the retroactive application serves the public purpose of preventing undue hardship and does not constitute a gift of public funds