I sold my primary home on a short sale in 2012. Do I need to report the amount of mortgage debt forgiven as income?
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Tax Professional Answers
Steven Potts JD EA
You can exclude canceled (forgiven) debt from income if it is qualified principal residence indebtedness (QPR). QPR is any mortgage you took out to buy, build, or substantially improve your main home. It also must be secured by your main home. QPR also includes debt secured by your main home that you used to refinance a mortgage you took out to buy, build, or substantially improve your main home but only up to the amount of the old mortgage principal just before the refinancing.Leave a Comment 417 weeks ago