Janitor Bob Posted March 4, 2008 Report Share Posted March 4, 2008 Please review the facts below and let me know if you agree. Client received 1099-A Box 1: Date of aquisition 03/21/07 Box 2: Balance of Principal Outstanding $65,493.32 Box 4: Fair Market Value of Property $46,000.00 Box 5: Yes...Borrower Personally liable for debt It looks to me like client has a loss of $19,493.32....Since primary residence, no loss can be taken. I will tell client to expect a 1099-C for debt forgiven. We will use this on tax return next year. Due to recent legislation (Form 982), this debt will NOT be taxable, correct? Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 4, 2008 Report Share Posted March 4, 2008 CORRECTTTTTTTT You need to know the basis of the house. These people refinanced many times in the past. isn't editing great!!!! Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted March 4, 2008 Author Report Share Posted March 4, 2008 WRONGGGGGGG. You need to know the basis of the house. These people refinanced many times in the past. WOW...a simple "Wrong" would have been sufficient...now you have wasted a bunch of capital letters. They never re-financed....original loan amount was $73,000 Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 4, 2008 Report Share Posted March 4, 2008 I like to emphasize that we need to calculate the basis because just the 1099-A is not enough. That's the reason for the extra capitals. As you know you need to consider many factors on the basis. To mention a few, improvements, insurance payment for damages, bequests, etc. On the 1099-A the bank is only saying, I am buying back this house from this guy. I am paying the amount on box 4 and he owes me the amoung on box 2. They also say yes or no to "personally liable on question 5. That's all it says. Quote Link to comment Share on other sites More sharing options...
JANIE GILMORE Posted March 7, 2008 Report Share Posted March 7, 2008 I HAVE A SIMILAR QUESTION AND HAVE READ THE POSTS BUT STILL DO NOT UNDERSTAND IF WE NEED TO FILE ANYTHING FROM THE 1099A. CLIENT INHERITED HOME WHEN HIS MOTHER DIED AND LOST IT IN 2007. HE HAD BEEN INSOLVENT FOR SEVERAL YEARS AND DID NOT HAVE TO FILE TAX RETURNS UNTIL THIS YEAR BECAUSE OF THIS. HIS ONLY INCOME IS FROM SOCIAL SECURITY DISABILITY AND A COUPLE OF HUNDRED DOLLARS IN PENSIONS AND INTEREST. WHAT SHOULD WE FILE TO SATISFY IRS WITH THE 1099A? THE EXCLUSION FOR CANCELLATION OF DEBT FOR PRINCIPAL RESIDENCE WILL BE APPLICABLE FOR HIM WHEN HE RECEIVES THE 1099C IN 2008, BUT AM UNSURE ABOUT WHAT TO FILE THIS YEAR. THANKS FOR ANY HELP. JANIE Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted March 7, 2008 Author Report Share Posted March 7, 2008 I HAVE A SIMILAR QUESTION AND HAVE READ THE POSTS BUT STILL DO NOT UNDERSTAND IF WE NEED TO FILE ANYTHING FROM THE 1099A. CLIENT INHERITED HOME WHEN HIS MOTHER DIED AND LOST IT IN 2007. HE HAD BEEN INSOLVENT FOR SEVERAL YEARS AND DID NOT HAVE TO FILE TAX RETURNS UNTIL THIS YEAR BECAUSE OF THIS. HIS ONLY INCOME IS FROM SOCIAL SECURITY DISABILITY AND A COUPLE OF HUNDRED DOLLARS IN PENSIONS AND INTEREST. WHAT SHOULD WE FILE TO SATISFY IRS WITH THE 1099A? THE EXCLUSION FOR CANCELLATION OF DEBT FOR PRINCIPAL RESIDENCE WILL BE APPLICABLE FOR HIM WHEN HE RECEIVES THE 1099C IN 2008, BUT AM UNSURE ABOUT WHAT TO FILE THIS YEAR. THANKS FOR ANY HELP. JANIE I filed a Schedule D (there is a page for sale of principal residence). Hopefully that wll satisfay the IRS for matching purposes. Quote Link to comment Share on other sites More sharing options...
Donny Posted March 7, 2008 Report Share Posted March 7, 2008 I filed a Schedule D (there is a page for sale of principal residence). Hopefully that wll satisfay the IRS for matching purposes. how did you figure the selling pirce from 1099A? Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted March 7, 2008 Author Report Share Posted March 7, 2008 how did you figure the selling pirce from 1099A? Box 4 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.