Posted on: 19th Feb, 2010 01:07 pm
I receive the form 1099A for my house that was foreclosed in December 2009.I file for bankcrutcy and it was dismiss cause the lawyer told me i didn't need to go to the court two times. the house was sold for 233,000
and we owe 457,000 why is IRS Charging $17,000
and we owe 457,000 why is IRS Charging $17,000
Hi Candy,
If you received a 1099A form and the property was sold for an amount less than what you owed, you will be liable for the deficiency. If this deficiency is discharged, it will be considered as your taxable income and you need to report it to the IRS. If the debt is discharged through bankruptcy, you will not be taxed. But since your bankruptcy case was dismissed before the discharge, you will have to pay tax on the income due to discharge of indebtedness.
However, did you use the property as your primary residence? In that case, you can claim exemption from paying taxes on this discharged debt under the Mortgage Forgiveness Debt Relief Act of 2007.
If you received a 1099A form and the property was sold for an amount less than what you owed, you will be liable for the deficiency. If this deficiency is discharged, it will be considered as your taxable income and you need to report it to the IRS. If the debt is discharged through bankruptcy, you will not be taxed. But since your bankruptcy case was dismissed before the discharge, you will have to pay tax on the income due to discharge of indebtedness.
However, did you use the property as your primary residence? In that case, you can claim exemption from paying taxes on this discharged debt under the Mortgage Forgiveness Debt Relief Act of 2007.