Yep, the debt foregiveness is "income" in the eyes of the IRS, and taxable. However, if its on your primary residence, its exempt. Also exempt if you are insolvent when the property goes back, also exempt if you declare bankruptcy.
I believe there's also a defense to taxability if you live in a state like Washington, where the only remedy the creditor gets in non-judicial foreclosure is the property back, and the deficiency is automatically waived by the creditor just by virtue of creditor having chosen that method of foreclosure. Because the creditor chose the method of foreclosure, I think the so-called "income" from debt foregiveness would be "income" assigned by a third party, which is not taxable.
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Today's Featured Article - Piston Ring Removal and Replacement - by Chris Pratt. Piston Ring Removal and Replacement - Replacing rings is a fairly easy process to stretch the engines usability between major rebuilds and cut down on that blue smoke and high oil consumption. Frequently, replacing only the rings is not advisable because by the time you do the teardown and measurement of the components, the pistons are often beyond the manufacturers specification or something else you find will signify the need for a major rebu
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