ETax847 Posted April 7, 2015 Report Share Posted April 7, 2015 Taxpayer received a 1099-C for cancelled debt. This was her primary residence for 3 of the last 5 years, with the last 2 years it being a rental property. Does this taxpayer still qualify for the qualified discharged of principal residence indebtedness exclusion? Quote Link to comment Share on other sites More sharing options...
Pacun Posted April 7, 2015 Report Share Posted April 7, 2015 No, but if he is insolvent, he qualifies to exclude that from income. You have to make an adjustment to the basis and enter that on form 982. Quote Link to comment Share on other sites More sharing options...
ETax847 Posted April 7, 2015 Author Report Share Posted April 7, 2015 Thanks Pacun. Do you have a source to cite? Quote Link to comment Share on other sites More sharing options...
Pacun Posted April 7, 2015 Report Share Posted April 7, 2015 (edited) I will post something, but wait for other to chime in. Edited April 7, 2015 by Pacun Quote Link to comment Share on other sites More sharing options...
Pacun Posted April 7, 2015 Report Share Posted April 7, 2015 Based on the instructions for form 982, at the time of the cancellation of debt, that house was not the main home of your client. Another point to consider is where did he deduct the mortgage interest last year, sch E or A? Quote Link to comment Share on other sites More sharing options...
Pacun Posted April 9, 2015 Report Share Posted April 9, 2015 I guess your asking for citation scared others and that's why no one has answered. My answer is correct but I don't have cite. Quote Link to comment Share on other sites More sharing options...
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