Treat the situation as if you sold the home to the bank for the amount of the mortgage plus the excess amount.
Then, you either have a loss or a gain, depending on your cost basis. Losses on personal property are not deductible, while gains are subject to capital gains tax, except that you may be able to exclude some of the gains depending on the timing. See publication 523.
https://www.irs.gov/forms-pubs/about-publication-523
