Homeowners who have had their mortgage debt forgiven have a reason to celebrate. In the past the part of the mortgage debt that was forgiven was subject to ordinary income tax by the US government. The tax was considered by many to be salt in the wounds of already distressed homeowners who were unable to make their mortgage payments.
Congress, however, changed all that by passing a new bill that would repeal the debt cancellation tax. Homeowners who now have they mortgage debt cancelled will no longer be expected to pay a tax bill that they can't afford.
As always, homeowners who have their mortgage debt cancelled should consult a tax professional before doing their taxes.
Good luck!
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