Posted on: 26th Mar, 2010 10:42 am
I forclosed on my rental home. The balance owed was less than the fair market value. Do I still have to report this on my taxes and if so, which forms would I use?
Hi ghj,
If the principal balance you owed on the mortgage was less than the fair market value of the property, you do not have to report any income on your taxes. This is because there was no discharge of debts and you did not have any income from any cancelled debt amount. If the fair market value was less than the principal amount owed on the mortgage, you would have to report it to the IRS.
Thanks,
Jerry
If the principal balance you owed on the mortgage was less than the fair market value of the property, you do not have to report any income on your taxes. This is because there was no discharge of debts and you did not have any income from any cancelled debt amount. If the fair market value was less than the principal amount owed on the mortgage, you would have to report it to the IRS.
Thanks,
Jerry