It looks like the president will sign an extension today of the Mortgage Debt Forgiveness Act through 2016. Why Congress waited again until the last minute to do this is beyond me? Last year, the same thing happened. Congress waited until the end of 2014 to extend it through 2014. How are owners of underwater properties supposed to plan ahead without knowing the law?

The result of this is that any homeowner whose primary residence was foreclosed upon or sold at a short sale in 2015 will not have to pay income tax in the forgiven debt.