Long-suffering taxi-medallion owners may get local, federal help

Crain's New York Business reports:

Taxi medallion owners who have been struggling to pay off their loans may finally be getting help. In addition to a City Council proposal to buy up loans at marked-down rates and pass along the savings, a New York congressman unveiled a bill Friday that would provide tax relief to medallion owners that got a chunk of their debt forgiven.

The legislation would be critical to keeping those medallion owner-drivers from getting socked with a huge tax bill at the same moment they were being rescued from their underwater loans. Under current tax regulations, the IRS would look at debt relief as income. A cab driver who had just received $400,000 in loan forgiveness, for instance, could wind up owing as much as 50%—$200,000—in federal, state and city taxes.

Under the bill, the forgiven debt would be made tax-exempt.


"It's the right thing to do for these folks, to make them whole," said Queens Rep. Gregory Meeks, who is sponsoring the legislation along with the entire New York delegation. "There is precedent for this. It's what we did for homeowners who had debt forgiven in 2008."

Rent-seeking at its' finest.