These days with so many homeowners owing more on their mortgage than their home is worth there has been a lot of cancellation of mortgage debt. There are several events that can trigger this cancellation, a short sale, a foreclosure or an agreement worked out with the bank so a homeowner can stay in their home but the bank reduces the amount of the mortgage. The big question that people in these situations have is whether or not the forgiven debt is taxable. For advice specific to your situation you should always consult a tax professional but for a quick overview the following article sums it all up pretty well. Click here for the article.