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The Home Foreclosure and Debt Cancellation provision applies to debt forgiven in calendar years 2007 through 2016. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

Sample questions - Mortgage foreclosure assistance organization applying for exemption as hospital

What if I lose my home through foreclosure?

Information about Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments, including recent updates and related forms. Publication 4681 explains the federal tax treatment of canceled debts, foreclosures, repossessions, and abandonments.

Canceled Debts, Foreclosures, Repossessions, and Abandonments (For Individuals)

Use Publication 4731-A, Screening Sheet for Foreclosures/Abandonments and Cancellation of Mortgage Debt, to assist taxpayers with Form(s) 1099-A and/or 1099-C with cancellation of debt issues.

Publication 5550, Real Estate Property Foreclosure and Cancellation of Debt Audit Technique Guide, discusses the tax consequences for real estate property that is disposed of through foreclosure, short sale, deed in lieu of foreclosure, and abandonments.

Oct. 3, 2024 — Terrylle Blackstone of Woodbridge, Virginia, was sentenced today in U.S. District Court to 60 months in federal prison for participating in a conspiracy that fraudulently promised thousands of homeowners across the U.S. legal help in avoiding foreclosure.

June 6, 2024 — Terrylle Blackstone, of Woodbridge, Virginia, pleaded guilty today in U.S. District Court in a conspiracy that fraudulently promised thousands of homeowners across the U.S. legal help in avoiding foreclosure. The scheme generated at least $15 million for the conspirators but never provided any legal services to the client-victims.

May 3, 2023 — An indictment was unsealed today charging four people, including two lawyers, with conspiring to defraud thousands of distressed homeowners who thought they were hiring a legal firm to help them avoid foreclosure. The defendants, some of whom were licensed to practice law in Washington, D.C., New Jersey, and Florida, allegedly reaped millions of dollars in ill-gotten gains.