What tax consequences will I face if I lost my home in a foreclosure?

For federal taxes, a foreclosure is viewed as the sale of property. Two separate matters will impact your tax liability: any gain from the sale of your property and credited income you receive from any debt forgiveness. There are ways to calculate your Gains and Cancellation of Debt. To learn the specifics on how your particular situation is impacted, visit the Home Foreclosure and Debt Cancellation section on the IRS website or contact a Liberty Tax® office for guidance.