If your lender cancelled or forgave your mortgage debt, you generally have to pay tax on that amount. But there are exceptions to this rule for some homeowners who had mortgage debt forgiven in 2012.
The IRS reminds all taxpayers that the fair market value of property or services received through a barter is taxable income. Both parties must report as income the value of the goods and services received in the exchange.
Here are 10 key facts from the IRS about mortgage debt forgiveness:
Use the Interactive Tax Assistant tool on IRS.gov to check if your cancelled debt is taxable. Also, see Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. IRS forms and publications are available online at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
All e-fileable forms, including Form 982, are free with TaxACT. The program will guide you step by step through mortgage debt forgiveness and offers free help every step of the way. Start your TaxACT return now.
Additional IRS Resources:
IRS YouTube Videos:
January 1 — Everyone
Federal Holiday (New Year's Day) - Details
January 12 — Employees who work for tips
If you received $20 or more in tips during December, report them to your employer - Details
January 12 — Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the first 15 days of December 2014.
January 14 — Regular method taxes
Deposit the tax for the last 16 days of December 2014.
January 15 — Individuals
Make a payment of your estimated tax for 2014 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES - Details
January 15 — Farmers & fishermen
Pay your estimated tax for 2014 using Form 1040-ES - Details
January 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in December 2014
January 15 — Nonpayroll withholding. January 20 — Everyone January 27 — Communications and air transportation taxes under the alternative method. January 29 — Regular method taxes
If the monthly deposit rule applies, deposit the tax for payments in December 2014.
Federal Holiday (Birthday of Martin Luther King, Jr./Inauguration Day) - Details
Deposit the tax included in amounts billed or tickets sold during the last 16 days of December 2014.
Deposit the tax for the first 15 days of January.
January 20 — Everyone
January 27 — Communications and air transportation taxes under the alternative method.
January 29 — Regular method taxes