Posted on: 21st Jan, 2013 03:50 pm
my husband and i filed chapter 7 in july of 2011. the bankruptcy was discharged in october of 2011. both our first and second mortgage (on what was our primary residence) were included in the bankruptcy. in the spring of 2012 we received a certified letter regarding the residence going up for auction in september of 2012. seeing as how we had already surrendered the property in the bankruptcy, we disregarded the paperwork. now (january 2013) we receive a 1099-a from the lender!
line 1 says the date of lenders acquisition is 9/18/12
line 2 70,017.89
line 3 (blank)
line 4 52,684.41
line 5 yes
i'm very confused. what do i need to do on my taxes. this debt should have been exempted with the discharge of our bankruptcy!
line 1 says the date of lenders acquisition is 9/18/12
line 2 70,017.89
line 3 (blank)
line 4 52,684.41
line 5 yes
i'm very confused. what do i need to do on my taxes. this debt should have been exempted with the discharge of our bankruptcy!
You probably don't owe any taxes on the forgiven debt. I would suggest that you have your taxes prepared by a competent tax professional this year.
Shouldn't the lender have sent a 1099-c, suggesting the difference has been forgiven? Doesn't a 1099-a imply that we are still responsible for the debt?
No. A 1099-A is the correct form for the scenario that you provided. 1099-A is an informational form. The lender didn't cancel your debt it was discharged in bankruptcy.