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Debt Forgivenes 4 residence turned rental then short sold.

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    #1

    Debt Forgivenes 4 residence turned rental then short sold.

    Client tells me he lived in personal residence for 28 months before walking away from house and mortgage while being under water by approx $50K. Clients personal residence finally sold "short sale" in Dec 2009 with client still being approx $50K underwater based on sale price. Client converted house in to a rental for 6 mos in 2009. I read TTB 14-10 thru 12 but unless I missed something, I dont recall seeing this covered. Client says all mortgage funds used to acquire and remodel house.

    Any idea how much if any would be forgiven?
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    #2
    Debt Forgivness

    Di you client receive a 1099C? I would not worry about it till he receives one.I have a couple of clients that walked away and I am waiting to see if they ever receive a 1099C.It is not forgiven till they receive it.

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