The loss on a personal residence or a 2nd home is not deductible on your return.
The mortgage amount does not determine the loss however.
You take the sales price less sales expenses (commissions, closing costs, etc.)
Then the cost of house sold, plus cost of improvements made over the years owned, is the adjusted cost or basis of the house sold.
The difference in these two (Sales price less adjusted basis in the house) determines the gain or loss.
