the misinformation on this thread is stunning.
First off, even if your state is non recourse, like Arizona, you actually can and will owe the tax depending on your conditions. If the law is not extended (not repealed as posted above, the original law ended the end of this year)
even so, the law only provided tax forgiveness on your resident property, or on investment property if you were insolvent at the time of the foreclosure/short sale. I know people who let the investment properties go first, since that way they were still insolvent due to owing so much on their primary residence, and after all the investments were gone, let the primary residence go.
do not use any of this for personal advice, seek the help of a competent real estate/tax attorney for your own situation, this law is complex, and mistakes could be very expensive to you!