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Good morning. Did you receive a 1099-C evidencing the forgiveness? Was this property you principal residence? Thanks.
Thanks. In that case, you have no tax liability to the IRS for the forgiveness. Normally, debt forgiveness results in taxableincome. But under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayersmay exclude debt forgiven on their principal residence if the balance of theirloan was $2 million or less. The limitis $1 million for a married person filing a separate return. Details are onForm 982 and its instructions.
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