Hi Jenkin, we lost an investment rental property that we had not lived in f

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Hi Jenkin, we lost an investment rental property that we had not lived in f

Hi Jenkin, we lost an investment rental property that we had not lived in for over 5yrs to a bank foreclosure in jan of 2010. The bank has recently sent us the 1099-a and it gives the box 2 balance of principal outstanding as 171,423 and the box 4 FMV of property as 184,924. Do we not have to pay capital gains tax to the Feds for the forgiven debt?. Ken

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Anonymous (not verified)
12-02-2011

3 Answers

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Hi Guest, As far as I know, you will be liable for paying taxes on the forgiven debt which will be considered as your income. However, depending upon the Mortgage Debt Relief Act, you may not have to pay taxes.

Comment

adonis | Asked on 2011-11-24

You won't have to pay taxes as far as I know and this is due to the Mortgage Debt Relief Act.

Comment

ashleyspeaks86 | Asked on 2013-06-26

I believe that you will have to pay the taxes on the capital gains.

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mintbaker90 | Asked on 2013-06-30

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