2010: Home was purchased in New Mexico, USA. Negligible down payment. PMI included. Price $152k
2019: Attempted short sale due to hardship (moving to a new city after losing job). Short sale failed with total lack of interest in the property, even at a price point of 66% of original cost. Mortgage company agreed to Deed-in-Lieu, with no further liability.
Is there a tax liability on any portion of the forgiven debt?
For additional details, the Mortgage Debt Relief Act of 2007 appears to exclude as income any debt discharged up to $2 million, applied only to your principal residence. The initial timeframe covered was between 2007 and 2010, but has been extended a 6th (and final?) time to 2019.