I just received a 1099-A. Box 4 is less than box 2. Will I pay as income on box 4 or the difference between the 2? Also, is this debt forvigin or will I receive a 1099-C? Is there any foreclosure forgivness laws that will apply to reduce the amount?

Thanks

There is a procedure that will let you avoid any taxes on the income that you "received" by having this debt forgiven. I did it twice last year for clients, and it is relatively painless for the taxpayer.

Go see a local tax professional for details.