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I received a 1099-A (no 1099-C) because I foreclosed on my rental property

I received a 1099-A (no 1099-C) because I foreclosed on my rental property in Nevada, and I am still personally liable for the loan. The FMV ($100K in box 4) of the property is less than the adjusted basis ($250K). The FMV ($100K in box 4) is also lower than the principal balance ($220K in box 2) of the loan. 1) What should I report as the sales price? Should I report the sales price as the FMV or the principal balance of the loan? 2) I believe I have a loss of $150K (=FMV of $100K minus adjusted basis of $250K). Is that loss deductible against my personal income? If I can report the loss against my personal income, my tax liability for the year is $0 because the loss of $150K offsets my entire income for the year.

Asked on 11:43 pm Sep 19th 2011

Anonymous

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Hi Guest,

Yes, you're liable to pay off the deficient balance resulting from the sale of the property to the lender. The amount of money for which you sold off the property will be considered as your sales price. The FMV and principal balance is not the same. The loss can be deducted by you while you're paying taxes. You should contact a tax adviser and he will assist you further in this regard.

Answered on 12:06 am Sep 21st 2011

adonis

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I received a 1099-A (no 1099-C) because I foreclosed on my rental property

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