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  • Writer's pictureJared Miller Attorney at Law
    • Apr 2, 2021
    • 1 min read

Mortgage Debt Forgiveness Excluded from Taxable Income

Homeowners who receive a loan modification or benefit from home debt forgiveness are at risk of tax liability on the money they save. Sometimes a big one.

But on March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA). It includes the a foreclosure defense provision called the Qualified Principal Residence Indebtedness (QPRI) Exclusion, according to this report by the National Consumer Law Center.

Under the QPRI, taxpayers can exclude a maximum of $2 million of the forgiven debt from their taxable income. This provision is temporary and expires on January 1, 2026.

NOTE: This firm does not practice tax law; please see a tax professional for advice about your taxes.


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