H.R. 5637 — Introduced in House

I 113th CONGRESS 2d Session H. R. 5637 IN THE HOUSE OF REPRESENTATIVES September 18, 2014 Mr. Peters of California (for himself and Mr. Vargas) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide an exclusion from gross income for discharge of consumer indebtedness. 1. Short title This Act may be cited as the Consumer Debt Forgiveness Tax Relief Act of 2014. 2. Exclusion from gross income for discharge of consumer indebtedness (a) In general Paragraph (1) of section 108(a) of the Internal Revenue Code of 1986 is amended by striking or at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting , or, and by adding at the end the following: (F) the indebtedness discharged is qualified consumer indebtedness. . (b) Special rules relating to qualified consumer indebtedness Section 108 of the Internal Revenue Code of 1986 is amended by adding at the end the following: (j) Special rules relating to qualified consumer indebtedness (1) Qualified consumer indebtedness defined For purposes of this section, the term qualified consumer indebtedness means any indebtedness of a natural person arising out of a transaction in which the money, property, or services which are the subject of the transaction are primarily for personal, family, or household purposes. (2) Overall limitation The aggregate amount of discharged indebtedness treated as qualified consumer indebtedness for the taxable year shall not exceed the excess (if any) of— (A) $2,500, over (B) the aggregate amounts treated as qualified consumer indebtedness with respect to such taxpayer for all prior taxable years. . (c) Effective date The amendments made by this section shall apply to indebtedness discharged after the date of the enactment of this Act.