Home/Residence-Related Tax Changes
Exclusion from Income for Certain Cancellation of Debt on Principal Residence
The Mortgage Forgiveness Debt Relief Act of 2007 allows individuals to exclude from gross income a discharge of qualified principal residence indebtedness.
Exclusion on Sale of Main Home by Surviving Spouse
For sales after 2007, the maximum exclusion on the sale of a main home by an unmarried surviving spouse is $500 ,000 if the sale occurs no later than 2 years after the date of the other spouse’s death. However, this rule applies only if the requirements for joint filers relating to ownership and use were met immediately before the date of such death, and during the 2-year period ending on the date of such death, there was no sale or exchange of a main home by either spouse which qualified for the exclusion.