Posted on: 06th Feb, 2010 08:08 pm
I have a 1099-a from a Chapter7 bankruptcy. I owed $107,000 and the Fair Market value was $135,000.
I owed $11,000 on the bankruptcy, so the net-net result was that I lost $17,000 dollars on the whole deal.
As I owned the house for more than seven years, can I declare this as a long-term capital loss on my 1040?
Thanks in advance
I owed $11,000 on the bankruptcy, so the net-net result was that I lost $17,000 dollars on the whole deal.
As I owned the house for more than seven years, can I declare this as a long-term capital loss on my 1040?
Thanks in advance
Hi bkochis,
Did you receive the 1099A form from your lender? Did your lender foreclose the property? You owed $107k and the fair market value of the property was $135k. How much did the property sell for at the auction? Was the property sold at the fair market value? In case it didn't, there remained a deficiency from the sale of the home. If the deficiency is forgiven by the lender, he will send you a 1099C form and you will have to pay taxes on this amount. But if the debt has been discharged through bankruptcy, you do not have to pay any taxes on the forgiven debt amount.
If the property was foreclosed and sold for less than what was owed, the difference will be seen as a loss for your lender. I don't think you can claim it as your long-term capital loss on your 1040.
Did you receive the 1099A form from your lender? Did your lender foreclose the property? You owed $107k and the fair market value of the property was $135k. How much did the property sell for at the auction? Was the property sold at the fair market value? In case it didn't, there remained a deficiency from the sale of the home. If the deficiency is forgiven by the lender, he will send you a 1099C form and you will have to pay taxes on this amount. But if the debt has been discharged through bankruptcy, you do not have to pay any taxes on the forgiven debt amount.
If the property was foreclosed and sold for less than what was owed, the difference will be seen as a loss for your lender. I don't think you can claim it as your long-term capital loss on your 1040.
Yes, I received the 1099A from my lender. According to sale records I could find the house sold for $175,000. So my lender made money on the foreclosure.
Hi bkochis,
" Yes, I received the 1099A from my lender. According to sale records I could find the house sold for $175,000. So my lender made money on the foreclosure."
If your house was sold for $175k and you owed only $107k on the property, there remained excess money from the proceeds of the sale. The lender is not supposed to take the $68k money. You are supposed to get that money. But if indeed there was profit from the sale of the house, how would you claim long-term capital loss? Did you have any second mortgage or an equity loan on the property? Was the combined outstanding balance on all your secured debts more than what the house was sold for i.e. $175,000?
" Yes, I received the 1099A from my lender. According to sale records I could find the house sold for $175,000. So my lender made money on the foreclosure."
If your house was sold for $175k and you owed only $107k on the property, there remained excess money from the proceeds of the sale. The lender is not supposed to take the $68k money. You are supposed to get that money. But if indeed there was profit from the sale of the house, how would you claim long-term capital loss? Did you have any second mortgage or an equity loan on the property? Was the combined outstanding balance on all your secured debts more than what the house was sold for i.e. $175,000?