House Passes Tax Relief for Struggling Homeowners

Homeowners who must restructure their mortgages as they face foreclosure will dodge a tax hit under legislation that passed the U.S. House of Representatives on Tuesday.

The House passed on a voice vote legislation that would for three years erase the tax bill that many homeowners would face as they struggle with burdensome home loan payments.

Under the legislation, debt that was forgiven in a foreclosure or as part of a loan workout will not be classified as income.

Last week, the Senate passed its version of reform, and lawmakers will now take the two versions to a conference where they will iron out the differences.