Posted on: 06th Feb, 2011 12:29 pm
I received a 1099-A. It has 0.00 in Box 2 Balance of principal outstanding. Box 4 FMV is 161,000.00. Which is incorrect since the decline of housing prices. It would be more 115,000.00. My question is if I have no outstanding principal owed do I have a tax liability on this?
Welcome graciesfire,
As you don't owe any outstanding balance, it means that the lender won't have to forgive any deficient balance. In such a situation, you won't be liable for paying off any taxes to the IRS regarding that debt.
As you don't owe any outstanding balance, it means that the lender won't have to forgive any deficient balance. In such a situation, you won't be liable for paying off any taxes to the IRS regarding that debt.