Giving big gifts of debt forgiveness to a few people is not consistent with the purpose of the exemption.

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One way of doing that is to provide an exemption from capital-gains taxation on all debt or equity instruments used in the next six months to invest in the troubled auto makers.

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Established in 2007 with the onslaught of the foreclosure crisis, the Mortgage Forgiveness Debt Relief Act grants distressed homeowners an exemption from paying federal taxes on forgiven mortgage principals.

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