Why is TT stating that cancelled mtg debt is excluded from taxation due to new law if it is for main home? That expired in 2016???

[Coleen3 · Accepted solution]

It was brought back to life. https://ttlc.intuit.com/questions/4241639-tax-relief-the-bipartisan-budget-act-of-2018

Cancelled, forgiven, and discharged debt is considered taxable income, unless it qualifies for an exclusion or an exception.

Normally the debt is reported on Form 1099-C. Make sure you enter your 1099-C in TurboTax even if it qualifies for an exclusion or an exception.

Exclusions

• Cancellation of qualified principal residence indebtedness, better known as mortgage debt relief;
• Debt cancelled in a Title 11 bankruptcy;
• Debt cancelled during insolvency (the amount exceeding your assets);
• Cancellation of qualified farm or real property indebtedness.

If the debt qualifies for any of these exclusions, TurboTax will complete Form 982 and include it with your return.

*This exclusion expired at the end of 2017, but now is extended to January 1, 2021 and applies retroactively to 2018 and 2019.