Posted on: 28th Mar, 2009 06:53 am
i recieved a 1099a form. box 2 (bal of prinicipal outstanding)- $212,084.36; box 4 (fmv) is $188,000.
i live in ny but the property was in fl. it was not an investment property as i originally planned to move into the house but separated from my fiancee before the intended move so i never moved and could not get the property sold. i was the sole owner of the property. the bank granted me a deed in lieu of foreclosure in july 2008.
am i liable to the irs to report the difference btw the fmw and principal bal as income?
i live in ny but the property was in fl. it was not an investment property as i originally planned to move into the house but separated from my fiancee before the intended move so i never moved and could not get the property sold. i was the sole owner of the property. the bank granted me a deed in lieu of foreclosure in july 2008.
am i liable to the irs to report the difference btw the fmw and principal bal as income?
If you did not sell the property Where is the tax gain? Am I missing something?
Hi helpmepls,
In a deed in lieu foreclosure, the lender would not sue you for the deficient amount resulting from the sale of the property. The deficient amount is forgiven. As the amount is forgiven, the lender issues a 1099-c form to you and you are required to pay taxes on the forgiven amount as it would be considered your income. You'll also have to report the difference to the IRS. The lender is mostly required to report the amount of canceled debt to you as well as the IRS on a Form 1099-A, Acquisition or Abandonment of Secured Property, or Form 1099-C, Cancellation of Debt.
Take Care.
In a deed in lieu foreclosure, the lender would not sue you for the deficient amount resulting from the sale of the property. The deficient amount is forgiven. As the amount is forgiven, the lender issues a 1099-c form to you and you are required to pay taxes on the forgiven amount as it would be considered your income. You'll also have to report the difference to the IRS. The lender is mostly required to report the amount of canceled debt to you as well as the IRS on a Form 1099-A, Acquisition or Abandonment of Secured Property, or Form 1099-C, Cancellation of Debt.
Take Care.