Hello,

For 2009, I will be filing single in VA with income under $30k, and won't have many regular deductions. I will most likely use the allowed standard deduction when I file.

However, earlier this year I sold my house as a short sale with a deficit of ~$90k. The mortgage co. is forgiving the debt, but I believe I will have to report the $90k as income and can then deduct it due to the Mortgage Debt Forgiveness Act from Congress.

Because of the large $90k deduction, does this mean I will be able to itemize and use other smaller deductions (i.e. clothing donations, etc.)? Or will I still need to take the standard deduction and the $90k is treated separate?

Thanks for any help anyone can provide.

Mike