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Hi Jenkin, we lost an investment rental property that we had not lived in f

Hi Jenkin, we lost an investment rental property that we had not lived in for over 5yrs to a bank foreclosure in jan of 2010. The bank has recently sent us the 1099-a and it gives the box 2 balance of principal outstanding as 171,423 and the box 4 FMV of property as 184,924. Do we not have to pay capital gains tax to the Feds for the forgiven debt?. Ken

Asked on 12:00 am Feb 12th 2011

Anonymous

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Hi Guest,

As far as I know, you will be liable for paying taxes on the forgiven debt which will be considered as your income. However, depending upon the Mortgage Debt Relief Act, you may not have to pay taxes.

Answered on 10:43 pm Nov 24th 2011

adonis

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