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Estate Tax Liabilities

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Junior Member
What is the name of your state (only U.S. law)? Indiana

I am the Executor of my Fathers estate and in addition to ~$5000 of the credit card debt that was forgiven, the Mortgage holder accepted a short sale on the property which resulted in ~$21000 difference. Will the estate be required to pay taxes on this ~$26000 or will the ~$21000 be covered under the Mortgage Forgiveness Debt Relief Act and not be taxable. I have been unable to find any information talking about how this affects estates. Additionally, if the $21000 will be covered under the act, what would the estimated tax on the $5000 be. The estate has had no income except for the proceeds from sale of misc personal property.

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