ljwalters Posted April 13, 2013 Report Share Posted April 13, 2013 Client sold rental house on short sale. Got cancellation of debt. The sale goes on the schedual E. Where does the 1099C go, on the E as income or the 1040 as other income? Also can insolvency work for this cancelation of debt even though it was a rental. I know I have done one of these a couple of years back but the losses on the rental wiped out the cancelled debt. This time the cancelled debt is to high Quote Link to comment Share on other sites More sharing options...
joanmcq Posted April 13, 2013 Report Share Posted April 13, 2013 Insolvency works for rentals. Quote Link to comment Share on other sites More sharing options...
jainen Posted April 13, 2013 Report Share Posted April 13, 2013 >>losses on the rental wiped out the cancelled debt<< Possibly this time the cancelled debt will wipe out the loss. Remember to reduce tax attributes on Form 982. They don't get a capital loss for money they never had to pay. 1 Quote Link to comment Share on other sites More sharing options...
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