In the past, if your home was sold for less than you owed on a mortgage and the lender forgave some of the debt you owed - most sellers got taxed on the amount forgiven similar to normal income.
As of December 20th, a new bill was passed that relieves many home sellers of this tax. The home has to have been sold between January 1, 2007 and December 31, 2009. If you have any questions about a specific transaction – CONSULT A TAX ADVISOR!
[...] it to make improvements on the house, like you bought a boat, it is taxable. For more details, read this. And remember when clients ask you for tax advice, the tax man is the expert, not the [...]