it's not a taxable event and no need to report. the legal language you quoted indicates the loan is non-recourse to you, meaning they can not come after you for any loss they experienced once they sold the property. (I saw @Carl as I was typing out this reply)
Google "Further Consolidated Appropriations Act, 2020". cancelled mortgage debt is not considered taxable (through 2021)
the other issue that you might need to address (and this is beyond me), whether there is recapture tax to pay since the property was rental and was depreciated for a period of time. That might create a need to report the sale, but the DIL without this issue need not be reported.
it is possible that the fair market value of the property was $379,000 as the lender was willing to cancel the debt of $379,000 in trade for the asset.
So the DIL itself is not a taxable event; however, whether there is recapture tax on the depreciation is the open question.
