House OK's "Short Sale" Tax Relief Bill

The New York Times reports:

• The House approved a measure yesterday to protect borrowers from getting a surprise tax bill from the Internal Revenue Service after lenders foreclosed on their homes.
  The bill, which still must pass in the Senate and be signed by President Bush to become law, would prevent the I.R.S. from taxing any debt forgiven in a foreclosure. The legislation would be retroactive to Jan. 1, sparing many of those who lost their homes to foreclosure this year from a surprise tax bill if their mortgage was canceled.
  The measure passed by a vote of 386 to 27.

For more, see House Passes Foreclosure Aid. short sale income tax