Denne Posted March 31, 2008 Report Share Posted March 31, 2008 My client came to me with something new to me.... The 1099A . She had told me the bank took back her rental property and I was really expecting a 1099C. She tells me a 1099C will not be issued. I don't know if that just means for this year of one will not be issued at all. The loan amount on the 1099A was $56,000 however the property Value is listed at $20,000. The bank did sell the property for the $20,000. She actually paid $65,000 for this property two to three years ago. Is she entitled to take a loss on the "Sale" of the property by the bank? It seems like that is what I am reading, but I am not sure how to make the proper calculations....could use some advise there too..... Thanks! Quote Link to comment Share on other sites More sharing options...
LindaB Posted March 31, 2008 Report Share Posted March 31, 2008 My client came to me with something new to me.... The 1099A . She had told me the bank took back her rental property and I was really expecting a 1099C. She tells me a 1099C will not be issued. I don't know if that just means for this year of one will not be issued at all. The loan amount on the 1099A was $56,000 however the property Value is listed at $20,000. The bank did sell the property for the $20,000. She actually paid $65,000 for this property two to three years ago. Is she entitled to take a loss on the "Sale" of the property by the bank? It seems like that is what I am reading, but I am not sure how to make the proper calculations....could use some advise there too..... Thanks! There is a worksheet for foreclosures and repossessions in Pub. 544, 'Sales and Other Dispositions of Assets.' According to that, you would use the $20,000 as the sales price (lesser of FMV or debt canceled). There should also be ordinary income from cancelation of debt of $36,000 ($56,000-$20,000), I don't know why they said a 1099-C wouldn't be issued--maybe it will be in 2008. I would go ahead and report the sale on 2007 return. Quote Link to comment Share on other sites More sharing options...
Denne Posted March 31, 2008 Author Report Share Posted March 31, 2008 There is a worksheet for foreclosures and repossessions in Pub. 544, 'Sales and Other Dispositions of Assets.' According to that, you would use the $20,000 as the sales price (lesser of FMV or debt canceled). There should also be ordinary income from cancelation of debt of $36,000 ($56,000-$20,000), I don't know why they said a 1099-C wouldn't be issued--maybe it will be in 2008. I would go ahead and report the sale on 2007 return. Thank so much. I will look for the worksheet! Quote Link to comment Share on other sites More sharing options...
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