S861 - Mortgage Forgiveness Tax Benefit

• Excludes discharged qualified principal residence indebtedness from North Carolina state income tax for taxable years beginning on or after January 1, 2016.

• If HB 973 or SB 726 passes, requires taxpayers to add back to North Carolina taxable income the amount excluded from federal gross income under section 108 of the Internal Revenue Code, but only for taxable year 2014.

• If HB 973 or SB 726 does not pass, allows taxpayers to deduct from adjusted gross income the amount excluded from federal gross income for discharge of qualified principal residence indebtedness.

• Applies to permanent residences where mortgage debt has been forgiven or discharged.