1099A Brother bought house, Sister lived in, Now foreclosed

[ChEAr$]

Follow the money

So the 1099 suggests income? See subject. Who got the money?

[Jack the Tax Lady]

Sister did not claim, she didn't think she could

Sister did not claim on her tax return, because the forms were in brother's name. She did not think she could.

She is not our client, and she lived in another state

[solomon]

Beneficial ownership would include such rights and obligations as: possession, obtain legal title upon full payment of the purchase price, construct improvements, pay property taxes, risk of loss, insure and maintain the property.

These would be the criteria that would be necessary to prove - which in short, are the burdens and benefits of ownership.

Do you know if the sister was claiming the mortgage interest and real estate taxes on her tax return? This would be an indication of the parties intent.

[Jack the Tax Lady]

that's what i was thinking, but he is now being audited

Appears the sister might be the beneficial owner. If so, she would do the reporting.

That's what I was thinking, but he is now being audited, and I am not sure how to explain this in a way that he can understand and the IRS agent can understand.

I am not representing him at audit, I am not an EA.

How would you address this with the auditor?

BTW, there are actually 4 houses involved. 2 personal, so the exclusion will apply, and 1 where there is no gain, then this one. So it is a little involved to explain to the auditor. I want to keep it as simple as possible.

We didn't address this on his tax return originally, because he moved more than once in the interim and never received the 1099s for these houses.

Thanks for any help.

[solomon]

Appears the sister might be the beneficial owner. If so, she would do the reporting.

[Jack the Tax Lady]

How would you handle this?

Brother bought house in his name because sister couldn't qualify. Sister made all payments until she stopped and house was foreclosed.

Brother did not live there, his personal house was also foreclosed.


purchased in 2004 $200,000

refied in 2006 $250,000

abandoned 06-01-2009

Received 1099A for 2009

balance of principal outstanding $300,000

FMV $250,000

neither box checked

*names, dates, and dollars have been changed to protect the ?