taxes on Short sale

[Sw3tflower]

California
I filed for divorce last year. Right now,temporary spousal support is my only income.
We just did a short sale on our house, about $150,000 short. The bank forgave the difference and said they would not pursue it later.
I heard my husband is planning to declare bankruptcy, personal and business, before the close of escrow.
The 2009 taxes will be filed separately, although the divorce will probably not be final.
Am I liable for the tax on the short sale if he declares bankruptcy?

[LdiJ]

Originally Posted by Sw3tflower

California
I filed for divorce last year. Right now,temporary spousal support is my only income.
We just did a short sale on our house, about $150,000 short. The bank forgave the difference and said they would not pursue it later.
I heard my husband is planning to declare bankruptcy, personal and business, before the close of escrow.
The 2009 taxes will be filed separately, although the divorce will probably not be final.
Am I liable for the tax on the short sale if he declares bankruptcy?

Probably not. Most likely you qualify for forgiveness under the Mortage Debt Relief Act.