Posted on: 05th Feb, 2010 07:13 pm
I received a 1099a for principle of 48000 and fmv of 59000 after giving deed back to lender in lieu of foreclosure.Do I have any tax liability?
Speak to a tax professional. We can only give you mortgage advice
To mark,
If the fair market value listed on the 1099A form is more than the principal amount owed, you do not owe any taxes to the IRS. The reason is, you do not have any income from discharge of debts. But if the principal amount you owe is more than the fair market value of the property, you will be responsible to pay taxes on the balance amount. However, even then you can avail exemption from paying taxes on this discharged debt amount, given you used the property as a principal residence.
If the fair market value listed on the 1099A form is more than the principal amount owed, you do not owe any taxes to the IRS. The reason is, you do not have any income from discharge of debts. But if the principal amount you owe is more than the fair market value of the property, you will be responsible to pay taxes on the balance amount. However, even then you can avail exemption from paying taxes on this discharged debt amount, given you used the property as a principal residence.
