Box 5 = "Was the borrower personally liable for repayment of the debt?"
Does anyone know why the IRS instructions for the lenders instruct the lender to check YES when the property was abandoned?
The IRS instructions for Box 4: "For a foreclosure, execution, or similar sale, enter the FMV of the property. See Temp. Reg. section 1.605J-1t, Q/A-32. Generally, the gross foreclosure bid price is considered to be the FMV. If an abandonment or voluntary conveyance to the lender in lieu of foreclosure occurred, check "Yes" in box 5 and enter the appraised value of the property. Otherwise, make no entry in this box."
If the contract, and state law, determine that the debt is non-recourse, why would this be in the instructions? Anyone?
My feeling is that we can't rely much on the accuracy of the 1099.
Does anyone know why the IRS instructions for the lenders instruct the lender to check YES when the property was abandoned?
The IRS instructions for Box 4: "For a foreclosure, execution, or similar sale, enter the FMV of the property. See Temp. Reg. section 1.605J-1t, Q/A-32. Generally, the gross foreclosure bid price is considered to be the FMV. If an abandonment or voluntary conveyance to the lender in lieu of foreclosure occurred, check "Yes" in box 5 and enter the appraised value of the property. Otherwise, make no entry in this box."
If the contract, and state law, determine that the debt is non-recourse, why would this be in the instructions? Anyone?
My feeling is that we can't rely much on the accuracy of the 1099.