[time4good]

Are you sure about that? We had to do a short-sale in 2007 and last year when my accountant did my taxes, he stated the end of 2007 Congress [Schmucky Schumer - my insert] changed the laws so if primary residence was the one that was short-sold and difference was less than $500K then the forgiven debt wasn't taxable income.

Check on this with your CPA.

[DH]

I stand corrected. My original post was correct for all loans that were not for the financing of a principal residence. The Relief act is only in effect for a principal residence from 2006 to 2012. After that, it’s null and void.

http://www.irs.gov/individuals/article/0,,id=179414,00.html