Mortgage Forgiveness Debt Relief
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Enter on the Canceled Debt (1099-C) Information screen.
The Mortgage Forgiveness Debt Relief Act of 2007 allows individuals to exclude from income any discharges of qualified principal residence indebtedness. Qualified principal residence indebtedness refers to a mortgage taken out to buy, build, or substantially improve your principal residence. It also includes debt secured by your home that is used to refinance this type of mortgage or for substantial home improvements to your principal residence.
In other words, if the mortgage debt is for your home or home improvements, it qualifies for exclusion. However, any part of the mortgage debt that was used to pay for vacations, cars, or other personal expenses does not qualify. If you were insolvent or bankrupt at the time of a mortgage foreclosure, the portion of the debt used for personal expenses may also be excluded from income under bankruptcy or insolvency rules.
Enter on the Canceled Debt (1099-C) Information screen.
The Mortgage Forgiveness Debt Relief Act of 2007 allows individuals to exclude from income any discharges of qualified principal residence indebtedness. Qualified principal residence indebtedness refers to a mortgage taken out to buy, build, or substantially improve your principal residence. It also includes debt secured by your home that is used to refinance this type of mortgage or for substantial home improvements to your principal residence.
In other words, if the mortgage debt is for your home or home improvements, it qualifies for exclusion. However, any part of the mortgage debt that was used to pay for vacations, cars, or other personal expenses does not qualify. If you were insolvent or bankrupt at the time of a mortgage foreclosure, the portion of the debt used for personal expenses may also be excluded from income under bankruptcy or insolvency rules.
