LT Pepper Law | Luke T. Pepper
In most instances, the deficiency which is the difference between the sale price and mortgage value is considered taxable income. There are some exceptions for the 2007, 2008 and 2009 tax years. So depending on when you bought your primary home, there may be no liability for the deficiency. I would talk to a tax advisor about how to best answer this question.
Answer Applies to: Pennsylvania