Criteria for Canceled Principal Residence Debt
You may assist taxpayers who meet the following requirements:
If the taxpayers do not meet these requirements, they may still qualify for the exclusion. However, the issues may be complex and beyond the scope of VITA/TCE. These taxpayers should be referred to a professional tax preparer and the volunteer should provide the taxpayer with a comprehensive list of resources and other possible referrals that are provided in Publication 4731, Screening Sheet for Foreclosures/Abandonments and Cancellation of Debt.
Click here to view Publication 4731, which provides step-by-step guidance for the volunteer tax-return preparer to determine if the cancellation of debt is within scope. Part I addresses foreclosure and abandonment; Part II addresses home mortgage loans; and Part III addresses canceled credit card debt. A copy of Publication 4731 can be found in the Volunteer Resource Guide (Income Tab).