Posted on: 21st Feb, 2010 08:35 am
Hi, I received the 1099A form from when my house was foreclosed on. My question is, in box #4 it shows the value of the property is more than the balance of what I owed by 29,000. I assume this means I owe nothing, correct? Secondly, I had a second JP Morgan Chase equity line which got wiped out in the foreclosure, but as of today 2/21/10 they've sent me no tax information. Is this proper on their part since they got nothing? Third, I filed for bankruptcy last year and it will be discharged in the next 45 days, does this affect anything? Thanks
Hi Richsun,
If the fair market value of the foreclosed property was more than what you owed, there is no deficiency and you do not owe any tax due to discharge of indebtedness. If the second lender has not sent you a 1099C form, it means he has not forgiven the second loan balance. He may come after you to collect it or may send it to collections. However, if you include the outstanding debt in your bankruptcy and it gets discharged, the second lender will not be able to come after you and you will also not owe any tax on this discharged debt.
If the fair market value of the foreclosed property was more than what you owed, there is no deficiency and you do not owe any tax due to discharge of indebtedness. If the second lender has not sent you a 1099C form, it means he has not forgiven the second loan balance. He may come after you to collect it or may send it to collections. However, if you include the outstanding debt in your bankruptcy and it gets discharged, the second lender will not be able to come after you and you will also not owe any tax on this discharged debt.