Daily Tax Report ®

Forgiven Mortgage Debt Could Mean Big Tax Unless Congress Acts

March 4, 2019, 9:45 AM

People who had home mortgage debt forgiven in 2018 after foreclosure or a short sale may find themselves owing thousands of dollars in unanticipated taxes this filing season.

The reason? Congress’ continued inaction on a set of expired tax breaks.

The temporary provisions, called “extenders,” are usually renewed every few years as part of a package consisting of tax breaks for businesses and individuals. But many of them expired at the end of 2017, and Congress has failed to act on them because of competing priorities and the new Democratic House’s desire to hold hearings on the provisions.

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