Mortgage Forgiveness Relief Act of 2007

NOTE: recently extended trough 2016

Beginning January 1, 2007 many taxpayers may be able to exclude from tax up to $2 million of mortgage debt forgiveness. This type of cancelled debt is normally reported to the taxpayer on a Cancellation of Debt Form 1099-C.

Other conditions that apply are:

  • Mortgage must be for principal residence, not vacation, rental or business property
  • Does not apply to home equity debt used for purposes other than acquiring, constructing or improving a principal residence
  • Exclusion is available through 2017

    Find more details on IRS website here

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