ACS41 Posted March 3, 2008 Report Share Posted March 3, 2008 I'm a bit confused and will appreciate any help I can get. Individual taxpayer living in Florida has investment property that he stopped making payments on in 2006. Was issued a 1099-A in 2007. To my knowledge, the bank has not sold the property yet. Box 2: $279,282 Principal balance outstanding Box 4: $252,000 Box 5: Yes (personally responsible) The deed in Lieu is for $5,000. Does the taxpayer need to wait until receiving a 1099-C when the property is sold in 2008, or do they need to recognize income in 2007? If so in 2007, is it $32,882 (279,882-252,000+5,000)? Thank you. Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 3, 2008 Report Share Posted March 3, 2008 Imagine that your client just sold the property for $252,000. Calculate your basis and (since this is an investment property) file gain or loss. Quote Link to comment Share on other sites More sharing options...
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