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Mortgage forgiveness debt relieve that allowed to exclude 1099C for the principle residence from your income expired at the end of 2014 and unfortunately wasn't extended. So, under current tax law the canceled debt is treated as taxable income unless you can claim insolvency. Insolvency means that your total assets (everything you own - house, cars, investment, retirement accounts) is less than your total debts (mortgage, credit cards, medical bills, student loans) immediately before your debt was canceled. The cancellation day is listed on 1099C.
For instance, if the debt was canceled on April 1, 2015, you will need to collect information about your assets and liabilities (debts) on or about March 31, 2015.
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