Exclusion for Qualified Principal Residence Indebtedness Extended until December 31, 2012

In my previous article When You Can Avoid Paying Income Tax on a Forgiven Mortgage, I discussed how the Mortgage Forgiveness Debt Relief Act of 2007 provided that qualified debt on a principal residence discharged between January 1, 2007 and December 31, 2009 was tax exempt.

Please be aware that pursuant to the Emergency Economic Stabilization Act of 2008, the discharge deadline has been extended until December 31, 2012. This is critical information for individuals facing the prospect of discharging mortgage debt in this difficult economy.