We received a 1099-a form today. The difference between balance and FMV is 37,000. We fall way below the $2 mil mentioned in the Home Mortgage Forgiveness Act of 2007. I am confused after reading all the publications, do we have to pay taxes on this amount, or will the Act of 2007 help us. Will I be able to fill out Form 982 so it will not send us into another tax bracket?

Thank you for your help!

Do you meet the qualifications listed here.

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation (http://www.irs.gov/individuals/article/0,,id=179414,00.html)