An article from RISMedia, examines what every real estate agent and homeowner needs to know about the Mortgage Forgiveness Debt Relief Act. Before December 2007, a homeowner would owe additional income tax on the difference between the price that a foreclose home sold for and what was owed to the bank. Last December, Congress decided to forgive this debt, but only for the 2007, 2008 and 2009 tax years. The mortgage must be for your principal house. Any debt from a home equity loan that was not used to build, buy or substantially improve a property will not be forgiven - it's taxable. The temporary relief extended by this act also applies in the case of a short sale.
http://rismedia.com/wp/2008-10-29/know-the-details-of-the-mortgage-forgiveness-debt-relief-act/
http://rismedia.com/wp/2008-10-29/know-the-details-of-the-mortgage-forgiveness-debt-relief-act/
