Posted on: 11th Mar, 2012 06:14 pm
I've received a 1099-C (Block #2=$82,000 and Block #3=$8,800). I have also received a 1099-S (Block #2=$130,000). This is all related to losing my job and doing a short sale on a primary home. I am trying to take the "Mortgage Forgiveness Debt Relief Act" path. I don't think 1E on Form 982 will work because the 1099-C does not match the 1099-S. So, it looks like "insolvency" is the only answer. Any pointers on a simple way to get this mess filed without paying taxes and avoid an audit?
Hi CocoFrogs,
I will suggest you to contact your you tax advisor and consult him regarding the forms that you have received. If you've received a 1099c form and your deficient balance resulting from the sale of the property is forgiven, then you can take help of the Mortgage Forgiveness Debt Relief Act and you won't be liable for paying the taxes for the forgiven debt.
Thanks
I will suggest you to contact your you tax advisor and consult him regarding the forms that you have received. If you've received a 1099c form and your deficient balance resulting from the sale of the property is forgiven, then you can take help of the Mortgage Forgiveness Debt Relief Act and you won't be liable for paying the taxes for the forgiven debt.
Thanks
Jameshogg,
Thanks for your response.
I understand the MFDRA will help with the 1099-C. I just don't know what to do about the 1099-S. I read to combine the two amounts, but that doesn't make sense to me.
CocoFrogs
Thanks for your response.
I understand the MFDRA will help with the 1099-C. I just don't know what to do about the 1099-S. I read to combine the two amounts, but that doesn't make sense to me.
CocoFrogs
Hi CocoFrogs!
Welcome to forums!
The Mortgage Forgiveness Debt Relief Act is valid till December 31st, 2011. As your property has been foreclosed within this time period, you will be able to take advantage of the Mortgage Forgiveness Debt Relief Act if your deficient balance is forgiven by the lender. As far as 1099s is concerned, check out the given page for further information: "http://www.irs.gov/instructions/i1099s/ar02.html"
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
The Mortgage Forgiveness Debt Relief Act is valid till December 31st, 2011. As your property has been foreclosed within this time period, you will be able to take advantage of the Mortgage Forgiveness Debt Relief Act if your deficient balance is forgiven by the lender. As far as 1099s is concerned, check out the given page for further information: "http://www.irs.gov/instructions/i1099s/ar02.html"
Feel free to ask if you've further queries.
Sussane
Sussane,
Thank you for the information.
The Mortgage Forgiveness Debt Relief Act will take care of the 1099-C. But the issue is the 1099-S. I cannot be the only one that ever got both of these 1099's with unmatching amounts.
Your link seems to instruct on how to create a 1099-S. The 1099-S is already filed with the the IRS. Now I have to do something with it.
How do you tie a 1099-S with the MFDRA and match it for filing purposes, when block #2 is higher than what was forgiven? Do I do a Schedule D as a loss or is there some other avenue? Why can't these "other than normal" circumstances be easily resolved?
Thanks in Advance,
CocoFrogs
Thank you for the information.
The Mortgage Forgiveness Debt Relief Act will take care of the 1099-C. But the issue is the 1099-S. I cannot be the only one that ever got both of these 1099's with unmatching amounts.
Your link seems to instruct on how to create a 1099-S. The 1099-S is already filed with the the IRS. Now I have to do something with it.
How do you tie a 1099-S with the MFDRA and match it for filing purposes, when block #2 is higher than what was forgiven? Do I do a Schedule D as a loss or is there some other avenue? Why can't these "other than normal" circumstances be easily resolved?
Thanks in Advance,
CocoFrogs
Welcome CocoFrogs,
I will suggest you to contact a tax adviser and take his opinion in this matter. He will look into the docs and help you know ways in which you may correct the form so that you don't face any problems in filing your taxes.
I will suggest you to contact a tax adviser and take his opinion in this matter. He will look into the docs and help you know ways in which you may correct the form so that you don't face any problems in filing your taxes.
I would like to understand and resolve this myself. I've been doing taxes most of my life and there's really no mystic about it. I just need a few pointers and hints on this particular issue from this awesome forum!!
Regards,
CocoFrogs
Regards,
CocoFrogs
...or not. :weep: