Posted on: 08th Mar, 2010 08:24 am
I wanted to file online and had received a 1099-a form.. Is this a taxable event now or when I receive the 1099-c form?
Hi scotty,
If your lender decides to not come after you for the mortgage balance and cancels the debt, the forgiven debt amount would be considered as your taxable income. A 1099A Form shows whether you owe any deficiency on the mortgage. Your lender will send you a 1099C Form if he forgives the deficiency. If the lender does not send you a 1099C Form, it means he can still come after you for the loan balance and it will not be considered as your income. Thus, you do not have to pay any tax for income from discharge of debt.
If your lender decides to not come after you for the mortgage balance and cancels the debt, the forgiven debt amount would be considered as your taxable income. A 1099A Form shows whether you owe any deficiency on the mortgage. Your lender will send you a 1099C Form if he forgives the deficiency. If the lender does not send you a 1099C Form, it means he can still come after you for the loan balance and it will not be considered as your income. Thus, you do not have to pay any tax for income from discharge of debt.