The only loophole was deducting interest on non-recourse debt, and that should remain limited in Section 469.

FORBES: Bring Back Housing By Bringing Back Tax Shelters

Just tweak Section 469 to limit its application to non-recourse debt only.

FORBES: Bring Back Housing By Bringing Back Tax Shelters

Going into 1986, there were tax shelter abuses, mostly from the use of non-recourse debt, and investors writing off much more than their cost basis.

FORBES: Bring Back Housing By Bringing Back Tax Shelters

That would include mortgage debt which is forgiven as a result of foreclosure, as well as debt restructuring, short sale or deed in lieu of foreclosure, so long as the debt is associated with the purchase, building or improvement of your main home and even if that debt is considered recourse debt.

FORBES: You Are Not Alone: R. Kelly Joins Taxpayers Who Have Lost Homes Due To Foreclosure

The market's confidence in the U.S. to service its debt (without recourse to inflationary money printing) is much more affected by expectations of long-term growth than by dog-and-pony exercises on spending that future Congresses will revisit umpteen times in the future.

WSJ: Jenkins: Lost Decade, Revisited

Leucadia was trying to collect on unsecured debt, where there is no collateral and little recourse for the lender.

FORBES: Judge Allows RICO Suit Over Debt-Collection Tactics To Proceed

As such, forgiveness of a non-recourse mortgage resulting from a foreclosure does not result in cancellation of debt income.

FORBES: You Are Not Alone: R. Kelly Joins Taxpayers Who Have Lost Homes Due To Foreclosure