If you filed had your home foreclosed or surrendered it in bankruptcy last year you will be receiving a 1099 from your mortgage company. Do not ignore this. Deal with it now, otherwise it will cause you problems in the future.
Here is what you need to do. There is a special tax relief available called the “Mortgage Forgiveness Relief Act of 2007“. This will forgive the debt and you will not owe any tax on the amount listed on the 1099 form. Make sure your tax preparer knows you suffered a foreclosure or filed bankruptcy. If you have already filed your tax return then you will need to file an amended return.