TP did loan modification on residence and continues to own residence. TP received 1099-C. Other then the possibility some of the cancellation of debt may have been used for other then acquire, refinance and/or improve the TP's residence, this amt on TP's 1099-C looks to be nontaxable or forgiven. Only did short sale and abandonments but never loan modification with 1099-C and TP continuing to own residence. Does this sound correct?
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As long as it falls under principal residence indebtedness and you're below the $2,000,000 exclusion limit, it's pretty simple. Just like a shortsale, but without the reporting of sale of the home & you have to include an amount on 10b of 982. The amount of income excluded reduces their basis in the home.
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