I had a home that went into foreclosure last year. It was a rental, but when I was unable to get a tenant I moved into the home. The home went to the bank in November and I had lived in it for seven months at that point. The bank issued a 1099-C with $75,000 on it as cancelled debt. Do I have to pay tax on the $75,000 now? The online version of TurboTax makes it look that way. Or does this come under the law that was passed last year for mortgage forgiveness? How long did I have to live in the house for it to count? Is it two out of five years? Thanks for any info.

