Aloha,
am I making a mountain out of a molehill? Here goes:
Client comes in today with two 1099-A, one for each of two different properties.
Both of them marked as recourse loans.
Property 1:
Box 2 [Balance of Principal Outstanding] = $77,XXX.XX
Box 4 [Fair Market Value of Property] = $55,XXX.XX
Property 2:
Box 2 = $58,XXX.XX
Box 4 = $59,XXX.XX
So, I would subtract Box 4 from Box 2, correct? For Property 1, that would be $22,XXX; for Property 2, it would be ($1,XXX). Normally, Property 2's loss is considered an ordinary loss, BUT IN THIS CASE BOTH PROPERTIES ARE RENTAL HOMES.
So, am I required to use 4797? Sch D? What? Since Property 2 is a small business/investment loss, does that offset a bit of the gain on Property 1?
One property was foreclosed, the other was "deed-in-lieu" [treated as a foreclosure].
Here is another question I have - I do not know her basis in either property. Is that figure germane, or do I strictly use the figures on the 1099-A? [I sent her home with a homework assignment to obtain the bases and to figure assets/liabilities so that I can see if Form 982 will mitigate her position].
And still another question - We are located in Texas, the rental properties are in Ohio. She has no other "income" of any kind from Ohio, so, if this generates "income" in Ohio for her, does she have an Ohio state tax liability.
Could really use some sharp answers,
Travis "Not-The-Sharpest-Knife-In-The-Drawer" Bickle
am I making a mountain out of a molehill? Here goes:
Client comes in today with two 1099-A, one for each of two different properties.
Both of them marked as recourse loans.
Property 1:
Box 2 [Balance of Principal Outstanding] = $77,XXX.XX
Box 4 [Fair Market Value of Property] = $55,XXX.XX
Property 2:
Box 2 = $58,XXX.XX
Box 4 = $59,XXX.XX
So, I would subtract Box 4 from Box 2, correct? For Property 1, that would be $22,XXX; for Property 2, it would be ($1,XXX). Normally, Property 2's loss is considered an ordinary loss, BUT IN THIS CASE BOTH PROPERTIES ARE RENTAL HOMES.
So, am I required to use 4797? Sch D? What? Since Property 2 is a small business/investment loss, does that offset a bit of the gain on Property 1?
One property was foreclosed, the other was "deed-in-lieu" [treated as a foreclosure].
Here is another question I have - I do not know her basis in either property. Is that figure germane, or do I strictly use the figures on the 1099-A? [I sent her home with a homework assignment to obtain the bases and to figure assets/liabilities so that I can see if Form 982 will mitigate her position].
And still another question - We are located in Texas, the rental properties are in Ohio. She has no other "income" of any kind from Ohio, so, if this generates "income" in Ohio for her, does she have an Ohio state tax liability.
Could really use some sharp answers,
Travis "Not-The-Sharpest-Knife-In-The-Drawer" Bickle