_____ 16.A taxpayer who disposes of his or her home in a short sale must recognize up to $1 million in cancellation of indebtedness income.

Question

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The amount of cancellation of indebtedness income that a taxpayer recognizes in a short sale depends on several factors, including the amount of the outstanding debt and the fair market value of the property. However, it is important to note that the Mortgage Forgiveness Debt Relief Act, which provided for certain exclusions of cancellation of indebtedness income related to principal residence indebtedness, expired at the end of 2017.

_____ 16A Taxpayer Who Disposes of His or Her Home in in a Short