I need help with this and hope someone out there can guide me. My client owned a condo. The basis at time of cancellation of debt was $154,386. It was used
for real estate rental. She received a 1099-A from the lender as she abandoned the property. They showed a balance of principal outstanding as $141,520 and
the Fair Market Value of the property as $148,876. I know she qualifies for a 982 Form. What goes on the 4797? Does the Adjusted Basis on the 497 include
the forgiveness of debt amount of $141,520. I do not seem to be able to figure the steps needed to get this right. The original purchase price of the
property was $176,900 and it was purchased on March 1, 2006. Also, there will be passive losses.
Thanks,
Eileen
