A taxpayer who had $250,000 of acquisition debt forgiven in 2017 on his $325,000 principal residence is required to reduce the basis of the home by the cancelled debt.

Name: A taxpayer who had $250,000 of acquisition debt forgiven in 2017 on his $325,000 principal residence is required to reduce the basis of the home by the cancelled debt.
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The basis of the home is reduced by the amount of acquisition debt forgiven, which is $250,000.

A Taxpayer Who Had $250,000 of Acquisition Debt Forgiven in 2017