Since the term "short sale" in real estate usually means selling the property for less than the outstanding debt, the short sale may be a gain, rather than a loss, if the lender is not insisting on full payment.
If this home has a loss and it was your personal residence, then the loss is personal and non-deductible. However, you will have to consider income from debt relief for the amount of debt that you did not have to pay back as a result of the short sale. For Federal tax purposes, you can be relieved of up to $2,000,000 in debt without taxation. Your State may or may not conform. You should check with a local tax professional.
Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.