Posted on: 17th Jun, 2009 01:00 pm
I called my bank to clarify a couple numbers on my 1098s for previous years. I found out that the house I thought was foreclosed was actually still in foreclosure. In November I was served with the notice of foreclosure. So I thought it was foreclosed. The bank never contacted me again.
I called today and I found out that in 2008 I was issued a 1099-A for the first loan. The principle outstanding is $35,000 more than the fair market value.
They did not issue a 1099-A for the second loan and the principle outstanding on the first loan definitely doesn't include the principle outstanding on the second loan. But still its less than the FMV.
They also told me that there are lawyers fees on each loan, but they don't know what they are. Somewhere in the neighborhood of $100K on the first loan and 8K on the second loan.
If they issued a 1099-A doesn't that mean the house is foreclosed? And will the $100K in legal fees show up in a new 1099-A next year if they sell the house? Will that hurt my next years taxes???
I am really in over my head and I just don't want to be caught owing them the legal fees or having the legal fees haunt my taxes another year.... thoughts???
I called today and I found out that in 2008 I was issued a 1099-A for the first loan. The principle outstanding is $35,000 more than the fair market value.
They did not issue a 1099-A for the second loan and the principle outstanding on the first loan definitely doesn't include the principle outstanding on the second loan. But still its less than the FMV.
They also told me that there are lawyers fees on each loan, but they don't know what they are. Somewhere in the neighborhood of $100K on the first loan and 8K on the second loan.
If they issued a 1099-A doesn't that mean the house is foreclosed? And will the $100K in legal fees show up in a new 1099-A next year if they sell the house? Will that hurt my next years taxes???
I am really in over my head and I just don't want to be caught owing them the legal fees or having the legal fees haunt my taxes another year.... thoughts???
Now what i think that you should feel the 1099 -A for the first loan and submit it to the lender.
Normally, one receive Form 1099-A, Acquisition or Abandonment of Secured Property, from one's lender. This form will have the necessary information one need to determine the exact amount of one's gain or loss and any ordinary income from cancellation of debt. one reports profit and loss from the sale of the property.
This is how the sender completes 1099-A:
Box 1. For an acquisition, enter the exact date you acquired the property.
Box 2. Enter the balance of the debt outstanding at the time the interest when the property was acquired or on the date you first knew or had reason to know that the property was abandoned. Include only unpaid principal on the original debt. make sure you do not include accrued interest or foreclosure costs.
Box 4. For a foreclosure, execution, or similar sale, enter the FMV of the property. In normal conditions , the gross foreclosure bid price is considered to be the FMV.
Normally, one receive Form 1099-A, Acquisition or Abandonment of Secured Property, from one's lender. This form will have the necessary information one need to determine the exact amount of one's gain or loss and any ordinary income from cancellation of debt. one reports profit and loss from the sale of the property.
This is how the sender completes 1099-A:
Box 1. For an acquisition, enter the exact date you acquired the property.
Box 2. Enter the balance of the debt outstanding at the time the interest when the property was acquired or on the date you first knew or had reason to know that the property was abandoned. Include only unpaid principal on the original debt. make sure you do not include accrued interest or foreclosure costs.
Box 4. For a foreclosure, execution, or similar sale, enter the FMV of the property. In normal conditions , the gross foreclosure bid price is considered to be the FMV.