Known as "cancellation of indebtedness income." https://www.irs.gov/newsroom/home-foreclosure-and-debt-cancellation https://www.irs.gov/newsroom/home-foreclosur

Known as "cancellation of indebtedness income." https://www.irs.gov/newsroom/home-foreclosure-and-debt-cancellation https://www.irs.gov/newsroom/home-foreclosure-and-debt-cance... Foreclosure of non-recourse loans does not trigger cancellation of indebtedness income. Instead, it could trigger capital gains.