Posted on: 29th Jan, 2010 05:53 pm
I received a 1099-A today for abandonment of property. I filed bankruptcy and was discharged from the debt in June 2009. The 1099-A says the principal balance is 24,986 which was the balance of the 2nd mortgage.... fair market value is at $100..... am I liable for taxes on this amount when I was discharged from this debt in the bankruptcy?
Hi islandgal,
Since the debt was discharged through bankruptcy, you will not be responsible for any taxes on the canceled debt amount. You have been sent 1099A form because lenders are required to report the canceled debt to the IRS. But it does not mean that you will have to pay taxes on this amount.
Since the debt was discharged through bankruptcy, you will not be responsible for any taxes on the canceled debt amount. You have been sent 1099A form because lenders are required to report the canceled debt to the IRS. But it does not mean that you will have to pay taxes on this amount.
Thanks so much... but I do still have to put this on my taxes right?
Hi islandgal,
You will have to report this to the IRS as your lender has sent you a 1099A form. But since the debt was discharged through bankruptcy, the IRS will not look at it as your taxable income and you will owe no taxes on the cancelled debt amount.
You will have to report this to the IRS as your lender has sent you a 1099A form. But since the debt was discharged through bankruptcy, the IRS will not look at it as your taxable income and you will owe no taxes on the cancelled debt amount.