http://www.etax.com <br /> <br />You usually do not need to report the amounts as taxable income, reported to you on forms 1099C or 1099A. <br />The Mortgage Forgiveness Debt Relief Act of 2007, effective through 2016, allows individuals to exclude from income any discharges of qualified principal residence debt of up to $2 million (or $1 million if married and filing a separate return). The house must have been used as a main home, which means it was your principal place of residence. <br />Canceled debts do not need to be included in taxable income if the debt was canceled in a bankruptcy case, if the individual is insolvent, or if the canceled debt was intended as a gift. Insolvency is when your debts exceed your assets at the time the debt was canceled.
