In the law to avoid the so-called “Fiscal Cliff” passed on New Year’s Day, Congress extended ?to January 1, 2014,?the exclusion from gross income of discharged mortgage debt from a qualified principal residence. ?See,?Section 202 of the American Taxpayer Relief Act of 2012:
“SEC. 202. EXTENSION OF EXCLUSION FROM GROSS INCOME?OF DISCHARGE OF QUALIFIED PRINCIPAL?RESIDENCE INDEBTEDNESS.
(a) IN GENERAL.?Subparagraph (E) of section?108(a)(1) is amended by striking ??January 1, 2013?? and?inserting ??January 1, 2014??.
(b) EFFECTIVE DATE.?The amendment made by this?section shall apply to indebtedness discharged after December 31, 2012.”