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The publication addresses when canceled debt may be excluded from income and how exclusions can require reducing tax attributes, along with key exceptions and required worksheets.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/template/","Template",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/template/forms/","Forms",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/template/canceled-debts-foreclosures-repossessions-and-abandonments-for-individuals-publication-4681-2025/281348/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/canceled-debts-foreclosures-repossessions-and-abandonments-for-individuals-publication-4681-2025/281348.png","ImageObject",442,249,{"name":42,"@type":43},"Mimi","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-23","2026-09-16",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",10,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"What generally happens for income tax purposes when a debt is canceled or forgiven for less than the full amount?","Question",{"text":63,"@type":64},"The debtor is treated as having income and may have to pay tax on that income. The publication explains the general rule for canceled debt.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"How do foreclosures and repossessions affect taxes?",{"text":68,"@type":64},"They are treated as remedies that let a lender seize or sell secured property. When the property is foreclosed or repossessed and sold, the taxpayer is treated as having sold the property and may recognize taxable gain.",{"name":70,"@type":61,"acceptedAnswer":71},"When can canceled debt be excluded from income, and what are tax attributes?",{"text":72,"@type":64},"Canceled debt may be excluded from income in certain situations described under Exclusions. If canceled debt is excluded, the publication explains that you may need to reduce your tax attributes.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},281348,1790210289,{"code":4,"msg":82,"data":83},"success",[84,89,94,99,104,109,113,118,123],{"id":85,"doc_module":22,"doc_module_name":25,"category_name":86,"show_sort_weight":87,"slug":88},11,"Presentations",90,"presentations",{"id":90,"doc_module":22,"doc_module_name":25,"category_name":91,"show_sort_weight":92,"slug":93},12,"Resumes",80,"resumes",{"id":95,"doc_module":22,"doc_module_name":25,"category_name":96,"show_sort_weight":97,"slug":98},14,"Invoices",70,"invoices",{"id":100,"doc_module":22,"doc_module_name":25,"category_name":101,"show_sort_weight":102,"slug":103},15,"Posters",60,"posters",{"id":105,"doc_module":22,"doc_module_name":25,"category_name":106,"show_sort_weight":107,"slug":108},16,"Social Media",50,"social-media",{"id":110,"doc_module":22,"doc_module_name":25,"category_name":29,"show_sort_weight":111,"slug":112},17,40,"forms",{"id":114,"doc_module":22,"doc_module_name":25,"category_name":115,"show_sort_weight":116,"slug":117},18,"Letters",30,"letters",{"id":119,"doc_module":22,"doc_module_name":25,"category_name":120,"show_sort_weight":121,"slug":122},21,"Paper Templates",5,"papers-templates",{"id":124,"doc_module":22,"doc_module_name":25,"category_name":125,"show_sort_weight":4,"slug":126},158,"General","general-158",{"code":4,"msg":82,"data":128},{"doc_id":79,"user_id":129,"nickname":42,"user_avatar":130,"doc_module":22,"category_id":110,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":131,"file_id":132,"file_url":133,"file_type":134,"file_size":135,"view_count":55,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":114,"language":136,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":137,"faqs":138,"seo_title":139,"seo_description":12,"update_tm":140,"read_time":141},2336477974920,"https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d","Nov 19, 2025  \nPublication 4681  \nCanceled Debts, Foreclosures, Repossessions, and Abandonments  \n(for Individuals)  \nFor use in preparing 2025 Returns  \n\n| |  |\n| --- | --- |\n| Get forms and other information faster and easier at: |  |\n| • [IRS.gov](IRS.gov) (English)\u003Cbr>• [IRS.gov/Spanish](IRS.gov/Spanish) (Español)\u003Cbr>• [IRS.gov/Chinese](IRS.gov/Chinese) (中文) | • [IRS.gov/Korean](IRS.gov/Korean) (한국어)\u003Cbr>• [IRS.gov/Russian](IRS.gov/Russian) (Pусский)\u003Cbr>• [IRS.gov/Vietnamese](IRS.gov/Vietnamese) (Tiếng Việt) |\n\n\n| Contents\u003Cbr>What's New . . . . . . . . . . . . . . . . . . 1\u003Cbr>Reminders . . . . . . . . . . . . . . . . . . . 2\u003Cbr>Introduction . . . . . . . . . . . . . . . . . . 2\u003Cbr>Common Situations Covered in This\u003Cbr>Publication . . . . . . . . . . . . . . . . 2\u003Cbr>Chapter 1. Canceled Debts . . . . . . . . 3\u003Cbr>Form 1099-C . . . . . . . . . . . . . . . 3\u003Cbr>Discounts and Loan\u003Cbr>Modifications . . . . . . . . . . . . . 4\u003Cbr>Sales or Other Dispositions\u003Cbr>(Such as Foreclosures and\u003Cbr>Repossessions) . . . . . . . . . . . 4\u003Cbr>Abandonments . . . . . . . . . . . . . . 4\u003Cbr>Stockholder Debt . . . . . . . . . . . . . 4\u003Cbr>Exceptions . . . . . . . . . . . . . . . . . . . 4\u003Cbr>Gifts, Bequests, Devises, and\u003Cbr>Inheritances . . . . . . . . . . . . . . 4\u003Cbr>Student Loans . . . . . . . . . . . . . . 4\u003Cbr>Deductible Debt . . . . . . . . . . . . . 6\u003Cbr>Price Reduced After Purchase . . . . . 6\u003Cbr>Exclusions . . . . . . . . . . . . . . . . . . . 6\u003Cbr>Bankruptcy . . . . . . . . . . . . . . . . 6\u003Cbr>Insolvency . . . . . . . . . . . . . . . . . 6\u003Cbr>Insolvency Worksheet . . . . . . . . . . 7\u003Cbr>Qualified Farm Indebtedness . . . . . . 8\u003Cbr>Qualified Real Property\u003Cbr>Business Indebtedness . . . . . . . 9\u003Cbr>Qualified Principal Residence\u003Cbr>Indebtedness . . . . . . . . . . . . . 9\u003Cbr>Reduction of Tax Attributes . . . . . . . .  10\u003Cbr>Qualified Principal Residence\u003Cbr>Indebtedness . . . . . . . . . . . .  10\u003Cbr>Bankruptcy and Insolvency . . . . . .  10\u003Cbr>Qualified Farm Indebtedness . . . . .  12 Qualified Real Property\u003Cbr>Business Indebtedness . . . . . .  12\u003Cbr>Chapter 2. Foreclosures and\u003Cbr>Repossessions . . . . . . . . . . . .  12\u003Cbr>Worksheet for Foreclosures and\u003Cbr>Reposessions . . . . . . . . . . .  13\u003Cbr>Chapter 3. Abandonments . . . . . . .  14\u003Cbr>How To Get Tax Help . . . . . . . . . . . .  15 |\n| --- |\n| Future Developments\u003Cbr>For the latest information about developments related to Pub. 4681, such as legislation enacted after it was published, go to [IRS.gov/](IRS.gov/)[ ](IRS.gov/)[Pub4681](Pub4681.)[.](Pub4681.) |\n\nWhat’s New  \nDischarge of qualified principal residence indebtedness after 2025. Qualified principal residence indebtedness cannot be excluded  \nPublication 4681 (2025) Catalog Number 51508F Department of the Treasury Internal Revenue Service [www.irs.gov](www.irs.gov)  \nfrom income for discharges completed or discharge agreements entered into after December 31, 2025.  \nA social security number (SSN) is required for the exclusion from gross income of a discharge of student loan debt after 2025.  \nIf a student loan is discharged, in whole or in part, after December 31, 2025, the amount of the debt discharged on account of death or total and permanent disability of the student may be nontaxable. However, you will have to include your SSN on your tax return. The SSN must be valid for employment and must have been issued before the due date of the return.  \n\n| Reminders\u003Cbr>Discharge of qualified principal residence indebtedness before 2026. Qualified principal residence indebtedness can be excluded from income for discharges before January 1, 2026.\u003Cbr>Discharge of student loan debt. If your student loan debt was discharged, in whole or in part, the amount of debt that was discharged may be nontaxable. See Student Loans, later. Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited |\n| --- |\n| Children® (NCMEC) . Photographs of missing children selected ","cbCainfNayWyDlan","https://ap.wps.com/l/cbCainfNayWyDlan","pdf",1335069,"English","# What's New\n## Reminders\n## Introduction\n## Common Situations Covered in This Publication\n# Chapter 1. Canceled Debts\n## Form 1099-C\n## Discounts and Loan Modifications\n## Sales or Other Dispositions (Such as Foreclosures and Repossessions)\n## Abandonments\n## Exceptions\n## Gifts, Bequests, Devises, and Inheritances\n## Student Loans\n## Deductible Debt\n## Price Reduced After Purchase\n## Exclusions\n## Bankruptcy and Insolvency\n## Insolvency Worksheet\n## Qualified Farm Indebtedness\n## Qualified Real Property Business Indebtedness\n## Qualified Principal Residence Indebtedness\n## Reduction of Tax Attributes\n# Chapter 2. Foreclosures and Repossessions\n## Worksheet for Foreclosures and Repossessions\n# Chapter 3. Abandonments\n## How To Get Tax Help","[{\"question\":\"What generally happens for income tax purposes when a debt is canceled or forgiven for less than the full amount?\",\"answer\":\"The debtor is treated as having income and may have to pay tax on that income. The publication explains the general rule for canceled debt.\"},{\"question\":\"How do foreclosures and repossessions affect taxes?\",\"answer\":\"They are treated as remedies that let a lender seize or sell secured property. When the property is foreclosed or repossessed and sold, the taxpayer is treated as having sold the property and may recognize taxable gain.\"},{\"question\":\"When can canceled debt be excluded from income, and what are tax attributes?\",\"answer\":\"Canceled debt may be excluded from income in certain situations described under Exclusions. If canceled debt is excluded, the publication explains that you may need to reduce your tax attributes.\"}]","Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals) - Publication 4681 (2025) | PDF",1789565650,6]