FYI - Affects California Taxpayers
Spidell released a FTB News Flash
Sandy
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Spidell released a FTB News Flash
FTB auditing COD income (2-1-11)
In January 2011, the FTB began mailing letters to pre-selected individuals who received a Form 1099-C, Cancellation of Debt (COD), for tax years 2007 and 2008.
According to the February 1, 2011, FTB Tax News, letters are scheduled to be mailed to taxpayers who had debt relief on properties such as a second home, rental, investment, or business property, which do not qualify for the principal residence exclusion.
These so-called "review" letters focus on COD income related to these “nonqualified properties” and advise taxpayers that they may still be able to exclude COD income under other provisions. Failure to promptly respond to the review letter could result in formal audit action, penalties, and/or a tax assessment.
In January 2011, the FTB began mailing letters to pre-selected individuals who received a Form 1099-C, Cancellation of Debt (COD), for tax years 2007 and 2008.
According to the February 1, 2011, FTB Tax News, letters are scheduled to be mailed to taxpayers who had debt relief on properties such as a second home, rental, investment, or business property, which do not qualify for the principal residence exclusion.
These so-called "review" letters focus on COD income related to these “nonqualified properties” and advise taxpayers that they may still be able to exclude COD income under other provisions. Failure to promptly respond to the review letter could result in formal audit action, penalties, and/or a tax assessment.
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