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LB&I Concept Unit - IRS tax forms

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2. Unrepaid recourse debt forgiven by a creditor gives rise to ordinary cancellation -of-debt income. Nonrecourse debt forgiven by a creditor is generally treated as an amount realized on the sale or exchange of the asset securing the nonrecourse debt. The debt forgiveness can potentially result in taxable gain. Practice Unit -

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Mortgage Forgiveness Debt Relief Act

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$20,000 of forgiven debt, all of the forgiven debt would be treat-ed as income. The Act contained two other pro-visions of interest to real estate practitioners. Mortgage insur-ance premiums will be treated as interest until December 31, 2010. This includes private, FHA and VA mortgage insurance premiums. Also, if a surviving spouse sells the ...

  Mortgage, Debt, Relief, Forgiveness, Forgiven, Mortgage forgiveness debt relief act, Forgiven debt

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