Posted on: 01st Feb, 2010 06:09 pm
I received a 1099-A form on a rental property I let go of. I owed $175,000 and the fmv is $135,000. Do I owe taxes on the differance?
Hi ronaleekay,
The 1099A form is sent to you by your lender for the deficiency from the foreclosure. It does not necessarily mean that your lender will not come after you for this money and will forgive this difference. Thus, the lender can still collect the deficiency from you. If they send you a 1099C form, it means they have forgiven the debt. In that case, the cancelled debt will be considered as your income and it will be taxed.
The 1099A form is sent to you by your lender for the deficiency from the foreclosure. It does not necessarily mean that your lender will not come after you for this money and will forgive this difference. Thus, the lender can still collect the deficiency from you. If they send you a 1099C form, it means they have forgiven the debt. In that case, the cancelled debt will be considered as your income and it will be taxed.
If I received a 1099-A how do I know if they are going to forgive the debt and send a 1099-C?
Thank You
Thank You
Hi Ronalee,
You need to contact your lender and check out if he will forgive the deficient dues. He will let you know whether or not he would sue you for that amount.
You need to contact your lender and check out if he will forgive the deficient dues. He will let you know whether or not he would sue you for that amount.