Mortgage Forgiveness Tax Relief Act of 2013

Mr. Speaker, just over two weeks ago marked the second anniversary of Superstorm Sandy's landfall in New Jersey. I toured several areas hit hardest by the storm, meeting with residents and local officials who have been working at the ground level throughout the recovery. Their resiliency is ever-present, and much progress has been made. It remains clear however that as residents and businesses continue to rebuild, the federal government can do more to ensure a full recovery by incentivizing continued investment in the hard-hit communities.

Many will never forget the iconic images following the storm of Casino Pier's Jet Star roller coaster standing in the Atlantic Ocean off the shore of Seaside Heights, NJ. Businesses such as Casino Pier would eventually receive insurance payments for their lost or damaged property, a transaction known as an ``involuntary conversion'' under the U.S. tax code. Once the involuntary conversion occurs, businesses have a two-year replacement period, after which time any gain may be recognized and subject to taxation.

With amusement rides and other costly business assets, full replacement can be impossible within the two-year period. Accordingly, following past disasters--including Hurricane Katrina, the 2007 Kansas storms, and 2008 Midwest storms, floods, and tornadoes--Congress has extended the replacement period to five years, giving businesses the time they need to reinvest the money in the community. The Sandy Reinvestment Extension Act of 2014 would provide the same extension to those affected in the Sandy disaster area, and would apply only where the replacement property is of substantial use in the same area-- ensuring reinvestment in the affected communities.

This legislation complements bills I have cosponsored--the Hurricane Sandy Tax Relief Act (H.R. 2137) and the Mortgage Forgiveness Tax Relief Act (H.R. 2994)--that together provide critical tax relief for homeowners and businesses still struggling to recover from Sandy. As we have learned from many previous natural disasters, recoveries take time, and victims are burdened long after the storm has passed.

Mr. Speaker, I urge my colleagues to consider the Sandy Reinvestment Extension Act of 2014 and other critical tax relief legislation that will provide homeowners and businesses in the Sandy-impacted region with the assistance and tools needed for a full recovery.

Mr. Speaker, on December 31, the tax exclusion for mortgage forgiveness expired. What does that mean? It means if someone sells their house for less than they owe, they have to pay tax on the difference.

The failure of the House Republican leadership to extend this forgiveness provision, which has been on the books since 2009, means that underwater properties all across the country--6 million of them-- now basically face paying taxes in terms of trying to do the right thing and get these properties to move.

In Connecticut today, there are 772 pending short sale closings that, again, the owners are going to be taxed because of the failure of the Republican leadership to move.

Mr. Camp said the other day that there is nothing to worry about; we have all year to deal with this. Well, the housing market can't wait. We need to move. H.R. 2994 will extend that mortgage forgiveness tax relief. It is time for this Chamber to take this measure up and vote on it.

Ask a realtor; ask a home builder; ask a mortgage broker. They all know. This market needs to get the overhang of distressed properties cleared out if we are going to have a healthy housing market and a strong recovery.

This Chamber needs to act. The Republican leadership needs to listen to people who are in the front trenches of the economy.