Mortgage debt forgiven? It may not be taxable

Normally, if a lender forgives a debt (something that’s happened a lot more lately), that forgiven amount counts as income (which makes sense; you did get the money after all). But the 2007 Mortgage Forgiveness Debt Relief Act of 2007 exempts some of that debt (e.g., if it was "used to buy, build or substantially improve your principal residence and be secured by that residence") from taxation — potentially up to $2 million of debt forgiven on your principal residence.

The IRS has the details on its "Ten Facts for Mortgage Debt Forgiveness" page. Check it out.

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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