In the wake of the 2008 Great Recession, Congress encouraged lenders to allow debt forgiveness, short sales, and deeds in lieu of foreclosure. The Mortgage Debt Forgiveness Act provides that there is no tax liability on the amount forgiven for a property sold short or tendered in a deed in lieu of foreclosure. For some people, this number is significant. For others, the taxation of the forgiven debt could be substantial. It is always a consideration when a homeowner is working through the loss mitigation process. The …