The exclusion from gross income for the discharge of qualified principal residence indebtedness is extended until January 1, 2026. Check the box on line 1e. The revived tax relief, known as the Qualified Principal Residence Indebtedness (QPRI) Exclusion, is something of a last-ditch escape hatch. The exclusion from gross income for the discharge of qualified principal residence indebtedness is extended until January 1, 2026. This tax break allows some taxpayers who've had mortgage debt forgiven—like after a foreclosure, loan modification, short sale, or deed in lieu of foreclosure—to exclude the canceled amount from their income for federal tax purposes. The following are available for 2018, 2019, and 2020. Exclusion from gross income of discharge of qualified principal residence indebtedness; ... 2020, may be deducted as qualified residence interest (subject to certain limitations). Exclusion from tax for qualified principal residence indebtedness (QPRI) Qualified principal residence indebtedness (QPRI) exclusion. This tax benefit has been extended one year and applies to mortgage interest premiums paid … This exclusion expired at the end of 2017, but now is extended to January 1, 2021 and applies retroactively to … The IRS indicates that you must claim at least one other exclusion first if you qualify for it, though you do have an either/or option with the other exclusion: For Tax Year 2020 - Per instructions for Form 982 -“If the income you exclude is from discharge of qualified principal residence indebtedness and one of … In late 2019, however, The Further Consolidated Appropriations Act, 2020, H.R. For discharges of indebtedness after December 31, 2020, the maximum amount that may be excluded is reduced to $750,000 ($375,000 for married individuals filing separately). For discharges of indebtedness after December 31, 2020, the maximum amount that may be excluded is reduced to $750,000 ($375,000 for married individuals filing separately). 2. 1865, RETROACTIVELY extended the Qualified Principal Residence Exclusion for 2017 through 2020. The federal Consolidated Appropriations Act of 2021 extended the Qualified Principal Residence Indebtedness (QPRI) exclusion through the year 2025. The exclusion from gross income for discharge of indebtedness on a qualified principal residence was originally for mortgage debt forgiveness that occurred in years 2007 through 2010. Part or all of your debt may not qualify for the exclusion on line 1e but may qualify for one of the other exclusions. During 2017 and 2018, a primary tool allowing homeowners to exclude canceled debt from income, the Qualified Principal Residence Indebtedness Exclusion, was not available. Although cancelled or forgiven debt is usually taxable, debt that is forgiven on your principal residence may be excluded from gross income and from tax. Summary of H.R.2275 - 117th Congress (2021-2022): To amend the Internal Revenue Code of 1986 to make permanent the exclusion from gross income of discharge of qualified principal residence indebtedness. A December 20, 2019 Congressional action revived and extended an important protection for struggling homeowners—the Qualified Principal Residence Indebtedness (QPRI) exclusion. Qualified principal residence indebtedness 1. Be sure to read the definition of qualified principal residence indebtedness in Line 1e, later. Claiming an Exclusion . Qualified principal residence indebtedness is debt that meets the Sec. Allowing this provision to expire would broaden the tax base and end a policy that was enacted in response to the housing crisis and Great Recession.
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