I guess by law they need to issue 1099 for the difference. Well, at the same time they need to write it off on their books as well. So, we cant escape 1099, for the difference no matter what. As for the taxes on 1099, it is the IRS that is getting the money, not the bank by itself. Maybe you can use that cash settlement money you are talking towards the taxes, if it is not substantial.
Bugger Guest
Posted: Thu Jan 22, 2009 7:49 pm Post subject: 1099
It just hurts that the banks get all of this money to get bailed out and I am going to lose my but when they file a 1099 on the difference of what I owe and what they sell the place for. I was making $10.00 an hr. when they gave me a $270,000. dollar loan for an investment property. Places like mine are now selling for $80,000. A 1099 will wipe me out. It is just scary to think everything I saved for in my life could be wiped out in one bad deal. Many sleepless nights. I take care of my parents and I am so afraid of losing my primary residence. Any help would be so much appreciated.
A 1099 is issued by the lender if he forgives the deficient amount resulting from the sale of the property. The forgiven deficient amount is considered as an income on part of the borrower and thus the IRS charges taxes on it. If you can pay off the deficient amount resulting from the sale then the lender will not issue a 1099 form.
""""""A 1099 is issued by the lender if he forgives the deficient amount resulting from the sale of the property. The forgiven deficient amount is considered as an income on part of the borrower and thus the IRS charges taxes on it. If you can pay off the deficient amount resulting from the sale then the lender will not issue a 1099 form.
""""
Thats very rare case. Take the example of the above guy who bought his place for 270 and now is worth 80.
If he has to pay the difference, it will be > 270-80 = 190 + bank incurred expenses. If the bank issues 1099, it would be tax on 190 which is abt 65. Now who in the right mind would be willing to pay 190 rather than 65...LOL
In the above case, do you think if this guy move in to that house, stays there for 5 months and then forclose will be beneficial and considered as primary residence? a way to get around 1099? Just a thought.
Guest
Posted: Mon Jan 26, 2009 12:28 am Post subject:
Well, as far as I know, in order to claim a property as one's primary residence, he/she should stay in the property for at least 2 years. So I don't think it is a way to get around 1099.
Bugger Guest
Posted: Fri Jan 30, 2009 6:01 am Post subject: 1099
Are you able to deal with the IRS? My taxes from a 1099 would be double that of my income a year. An attorney advised me just to let them foreclose and down the road there could be some negotiating with the collection agency. This would avoid a 1099.
Guest
Posted: Sat Jan 31, 2009 12:15 am Post subject:
A foreclosure ruins your credit score badly. Your credit score will go down by 250 points. It would be better if you can contact the IRS directly and speak to then in order to get some options to reduce the taxes.
Hi, My short sale was recorded on Dec 24th and even got a letter from the bank confirming the same saying that my account is paid in full and closed. I still did not receive 1099-C. Is it mandatory that they have to sent me 1099-C? What do I do if I dont get it? Am i still supposed to file 982 form? (I bought as I will not be knowing the exact difference). Any body experienced this ...doing a short sale and not received the 1099-C?
Thanks..
Bugger Guest
Posted: Thu Feb 19, 2009 3:31 am Post subject:
I am foreclosing on an investment property. I have lost alot of money on this already. I know there will be a 1099 issued to me for the difference of the sale to what I owe. Am I able to off set my losses with the capital gains to lower my IRS bill? This IRS bill could wipe me out. Any help would be appreciated.
Did you pay the deficient amount resulting from the sale of the property to the lender? If yes, then the lender will not send you a 1099-c form.
To Bugger,
As far as I know, if you foreclose a property, you will be liable to pay the deficient amount to the lender. The lender doesn't forgive the deficient amount in case of a foreclosure. In that case, you will not receive a 1099-c form.
Hi Adonis,
I dod not pay any deficiency amount in this case. And I did not get any 1099-C yet. I checked with the bank and they said they are not going to issue 1099-C. "Why" is not something I dont want to ask them. . My credit report recorded this as a normal sale, paid in full as agreed. I received a letter form recorders office as paid in full.
I think the sale of the property helped in paying off the total mortgage dues that you had with the lender. So the lender did not issue a 1099-C form and also reported it as paid in full.
kingno1
. My credit report recorded this as a normal sale, paid in full as agreed. I received a letter form recorders office as paid in full.
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