IRS Tax Tip 2013-31, March 12, 2013. If your lender cancelled or forgave your mortgage debt, you generally have to pay tax on that amount. But there are exceptions to this rule for some homeowners who had mortgage debt forgiven in 2012. Here are 10 key facts from the IRS about mortgage debt forgiveness:1  Cancelled debt normally results in taxable income.2  However, you may be able to exclude the cancelled debt from your income if the debt was a mortgage on your main home.RS Tax Tip 2013-31, March 12, 2013. If your lender cancelled or forgave your mortgage debt, you generally have to pay tax on that amount. But there are exceptions to this rule for some homeowners who had mortgage debt forgiven in 2012. Here are 10 key facts from the IRS about mortgage debt forgiveness: