1099-A without FMV

[appelman]

I raised this question before and it sunk like a stone, which is not typical of this forum, so I'm giving it one more try:

Partnership with foreclosure on rental property late in 2010. 1099-A received with loan balance, but no FMV. Indicated as personally liable for repayment of debt. Definitely under water when foreclosed. Presumably a 1099-C will appear (for 2011?) when the property is disposed of. Without either an FMV or a 1099-C, how do I handle this for 2010? Without the 1099-C there is no debt relief income, and without an FMV you can't calculate proceeds of the imputed sale.

[David1980]

Well, the obvious answer is whether stated or not, the property clearly has a FMV. One option would be to pay someone to appraise the property as of the date of abandonment.

[Gary2]

My quick take on the 1099-A instructions for FMV boils down to "Here's what to enter for a foreclosure, voluntary conveyance, or abandonment. In all other cases, leave it blank."

I'm not sure what other cases there could be for real property. I suppose it could be repossession for personal property, but I've never heard of repossession for real property. A deed of trust, from my little bit of reading about CA foreclosures, doesn't seem to imply a transfer of ownership at abandonment or any other identifiable event until the (non-judicial) foreclosure.

On the other hand, Pub 4681 says that for an abandonment, there's an ordinary loss equal to your adjusted basis, but if there's a subsequent foreclosure, then the loss must be recomputed, presumably as a capital loss, using the foreclosure price. But I won't stand behind this interpretation without confirmation from someone with more experience.

So this isn't an answer, just an indication of why you may not have gotten an answer.