My question involves a mortgage in the state of: Florida
My mother's primary residence was in the state of Florida. She passed in Dec. 2007. Mortgage payments could not be supported by estate assets and the house eventually went into foreclosure. The bank did not provide file any claim against the estate during the notification period. In Sept 2010, A 1099-A (abandonement) was issued where the outstanding principal is greater than the FMV. In terms of accounting for the difference between the principal and FMV which is about $200K, does this situation apply for the mortgage debt relief act where this would be exempt from tax as ordinary income? I have differing opinions coming from two accontants whether this situation could apply for this act. Any advice or opinion would be appreciated.