The following is taken (well… almost) directly from Ed McFerran, McFerran Law, P.S. (253) 284-3838 or www.mcferranlaw.com. He knows a lot of stuff.
First, you’re probably thinking to yourself… “Jen, we’re waaay past this whole recession thing. Why are you talking about debt forgiveness? Continue reading “Straight Talk About “Forgiveness.” No, not the kind of forgiveness at church. I mean the tax burden kind.”
If your mortgage debt is partly or entirely forgiven during tax years 2007 – 2013, you may be able to claim special tax relief and exclude the debt forgiveness income.
Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence. The limit is $1 million for a married person filing a separate return. Continue reading “Mortgage Debt Forgiveness”