Exclusion for Cancelled Home Mortgage Debt
If a lender cancels or forgives a debt you owe, you generally have to pay taxes on the amount of debt forgiven – known as Cancellation of Indebtedness Income (CODI). When it comes to your principal residence, however, an important exception to this rule may apply for 2013 (2013 is the last year in which this exclusion is available).
If the cancelled debt was a mortgage on your main home, or if the lender cancelled part of a mortgage through a loan modification program, you may be able to exclude the CODI from gross income. The exclusion may also apply to amounts cancelled on a refinanced mortgage.
Should you receive a 1099-C, Cancellation of Debt, this year, and you would like qualified advice on whether you may properly exclude the CODI from gross income, please contact the Law Offices of Bryan S. Kessler, P.A. by phone at (941) 786-1579 or email us today.