Posted on: 13th Mar, 2010 08:16 am
I received 7 1099a forms. 5 for me and 2 for my wife. These are for the rental properties that we owned and the rents could not cover the mtg pmts. I am not sure if this cancelation of debt. How am I going to use this on my taxes. Should my wife and I file joint or separately? There are a lot of publications with vagu information.
Hi Bruce,
Form 1099A is sent for Acquisition or Abandonment of Secured Property. If the fair market value listed on the Form 1099A is more than the mortgage balance, you will owe deficiency to the lender. In case the lender sends you a Form 1099C, it means the deficiency has been canceled.
The canceled debt will be considered as your taxable income and you will have to pay taxes to the IRS. If deficiencies on all the 7 rental properties are forgiven, you will owe taxes on each of them. You will have to report them to the IRS, irrespective of whether you file your taxes jointly or separately. However, I'd suggest you to consult a tax professional or an accountant in this regard.
Form 1099A is sent for Acquisition or Abandonment of Secured Property. If the fair market value listed on the Form 1099A is more than the mortgage balance, you will owe deficiency to the lender. In case the lender sends you a Form 1099C, it means the deficiency has been canceled.
The canceled debt will be considered as your taxable income and you will have to pay taxes to the IRS. If deficiencies on all the 7 rental properties are forgiven, you will owe taxes on each of them. You will have to report them to the IRS, irrespective of whether you file your taxes jointly or separately. However, I'd suggest you to consult a tax professional or an accountant in this regard.