| That depends on whether the short sale covers the cost of any underlying mortgage on the property.
If it does NOT, the mortgage company may either:
1) pursue collect from you the difference between what was owed and the proceeds from the sale through a collection agency and perhaps eventually via the courts.
2) write off the difference. If they choose to write it off, they may then originate a Form 1099-C and show the writeoff as implied income to you.
If you receive a Form 1099-C, you can file Form 982 under the Mortgage Forgiveness Debt Relief Act of 2007 to be relieved of any subsequent income tax on that Form 1099-C income, provided you meet the filing criteria. | 
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