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Forgotten Soul is a Legendary crafting material in Diablo III, obtained by using the Blacksmith to salvage non-crafted legendary weapons and armor, or set items. A Rift Guardian may also give up one or two of these upon defeat for players in the level range of 61-70 (guaranteed to drop at least one on Torment VII or higher), and Odious Collectors may drop a few as well.
Each legendary item salvaged will yield 1 Forgotten Soul. They can be stacked up to a maximum of 5000. All Forgotten Souls are account bound.