This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.
Click here for the most commonly asked questions and answers about The Mortgage Forgiveness Debt Relief Act and debt cancellation:
- Debt Relief Window Closing Soon (avidlawblog.wordpress.com)
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- Mortgage Forgiveness Debt Relief Act: Last Leg(realtorpartnership.wordpress.com)