Posted on: 22nd Sep, 2010 07:28 am
If a property is allowed to go into foreclosure (investment) and there is a possibility of a no deficiency judgement, will the bank still issue a 1099-C to the IRS for income?
Welcome handfseebo,
If the bank forgives the deficient amount, then he will issue a 1099c. The forgiven amount will be considered as your income by the IRS and you can taxed for it. However, depending upon the Mortgage Debt Relief Act, you won't be liable for paying the taxes on the forgiven debt.
If the bank forgives the deficient amount, then he will issue a 1099c. The forgiven amount will be considered as your income by the IRS and you can taxed for it. However, depending upon the Mortgage Debt Relief Act, you won't be liable for paying the taxes on the forgiven debt.