LouD Posted May 28, 2009 Report Share Posted May 28, 2009 I have a client that is working on a loan modification for a piece of land he’s held for a two years. Client is not a contractor or in the business of building homes, but the intent has always been to parcel off the land and build homes to sell but nothing has been done yet with the market the way it is right now. Bank has agreed to lower the loan amount due – so client will be paying off the $300k loan in full after a $80k reduction in loan as agreed to by the lender – so there will be a 1099-C coming to client for the $80k. Looking at the cancellation of debt exclusions, the only one he might qualify for is the Qualified Real Property Business Indebtedness – but the language that scares me is that the property “must be used in a trade or business”. Because he’s not in the business of building homes, would that disqualify him from using this exclusion? Are there any other factors that might help him qualify for this exclusion? He doesn't qualify for the insolvency exclusion, so I'm hoping there's some relief out there. Any help or guidance would be greatly appreciated! 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.