BulldogTom Posted March 3, 2010 Report Share Posted March 3, 2010 Taxpayers lost their home to the bank in Sept of 2009. 1099A issued. Non-recourse debt. Basis in home is 420K and loan is 330K. No 1099C issued yet. We are waiting a few weeks to see if the 1099C will come in this year before filing the return. How are you showing this on the return? I know that we have a sale or other disposition of a personal residence and the loss is not deductible. But I want to show it on the return. I used the Sale of Principal Residence worksheet on the D, but it does not flow to the D. So I put it in the input tab as a personal sale and it shows on the D as a non-deductble loss. I think I want it to look this way to prevent inquiry in the future. How are the rest of you handling the 1099A when it produces a loss? Are you just not showing it on the return or are you forcing it to the D like I did? Thanks for your opinions. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
Tax Prep by Deb Posted March 3, 2010 Report Share Posted March 3, 2010 Taxpayers lost their home to the bank in Sept of 2009. 1099A issued. Non-recourse debt. Basis in home is 420K and loan is 330K. No 1099C issued yet. We are waiting a few weeks to see if the 1099C will come in this year before filing the return. How are you showing this on the return? I know that we have a sale or other disposition of a personal residence and the loss is not deductible. But I want to show it on the return. I used the Sale of Principal Residence worksheet on the D, but it does not flow to the D. So I put it in the input tab as a personal sale and it shows on the D as a non-deductble loss. I think I want it to look this way to prevent inquiry in the future. How are the rest of you handling the 1099A when it produces a loss? Are you just not showing it on the return or are you forcing it to the D like I did? Thanks for your opinions. Tom Lodi, CA Forcing it as you do. Last year there was a sample in one of the publications how to do this, I haven't looked for it this year. As for a 1099C if it is a non-recourse loan then you shouldn't get a 1099C as this was part of their original contract. The bank agreed to take the home back if loan was defaulted on and they would have no other recourse against the owner, so therefore no cancellation of debt. Deb! Quote Link to comment Share on other sites More sharing options...
jainen Posted March 4, 2010 Report Share Posted March 4, 2010 >>waiting a few weeks to see if the 1099C will come<< Non-recourse debt means the foreclosure fully satisfies the obligation. There is no cancellation of debt in that case. Report it as a sale for the amount of debt. In your case this would presumably show a non-deductible loss on personal use property. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted March 4, 2010 Author Report Share Posted March 4, 2010 That is what I think should happen, but with banks just popping out 1099C's to everyone, I thought I would just wait and see what comes seeing as the deadline for 1099C's is Feb 28th. The client needs a few other pieces of information to complete the return, so it won't hurt to wait a little while. Thanks Jainen. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
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