Rental Property Short Sale

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  • TaxGal
    Junior Member
    • Feb 2007
    • 8

    #1

    Rental Property Short Sale

    A taxpayer completed a short sale on his rental property and received a 1099-C for $33,000 and a 1099-S for $495,000. How do I report the 1099-C? Is it reported on Form 982 and then do I reduce the basis of the property by this amount before computing the gain or loss on the sale? (The adjusted basis of the property is $622,000.) Any guidance would be most appreciated.
  • AZ-Tax
    Senior Member
    • Feb 2008
    • 2604

    #2
    I may have a similar one

    I am curious on this as well. A client is considering selling their rental this year which use to be their personal residence until Aug 2010 and based on current market price and their mortgage, its $45K in the red (underwater) therefore they probably would recieve a 1099-C for $45K. Just curious if they could take advantage of the Forgiveness of Debt (as with residentials) w/o having to show $0 net worth.

    Comment

    • Gary2
      Senior Member
      • Aug 2010
      • 2066

      #3
      Go to http://fogelcpa.com/articles.aspx and read all of the articles relating to canceled debt, foreclosures, and short sales (four articles, I think). Also check out his flowchart (the first link).

      Comment

      • Possi
        Senior Member
        • Mar 2006
        • 1432

        #4
        Now, THAT is GOOD!

        Originally posted by Gary2
        Go to http://fogelcpa.com/articles.aspx and read all of the articles relating to canceled debt, foreclosures, and short sales (four articles, I think). Also check out his flowchart (the first link).
        That information was more useful to me than anything I have ever read concerning these dadgum 1099C's.

        I applaud you!
        "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

        Comment

        • RitaB
          Senior Member
          • Jul 2008
          • 1382

          #5
          Yessss

          Clap, clap, clap!
          If you loan someone $20 and never see them again, it was probably worth it.

          Comment

          • Possi
            Senior Member
            • Mar 2006
            • 1432

            #6
            And....

            Originally posted by RitaB
            Clap, clap, clap!
            the crowd goes WILD!!!
            "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

            Comment

            • Gary2
              Senior Member
              • Aug 2010
              • 2066

              #7
              Originally posted by Possi
              That information was more useful to me than anything I have ever read concerning these dadgum 1099C's.

              I applaud you!
              Don't thank me, thank Mr. Fogel.

              Comment

              • RitaB
                Senior Member
                • Jul 2008
                • 1382

                #8
                Aw, shucks

                Originally posted by Gary2
                Don't thank me, thank Mr. Fogel.
                Yeah, but we appreciate the Gary that knows how to access Mr. Fogel's docs.
                Last edited by RitaB; 04-03-2012, 09:20 AM.
                If you loan someone $20 and never see them again, it was probably worth it.

                Comment

                • ChEAr$
                  Senior Member
                  • Dec 2005
                  • 3872

                  #9
                  Serendipity. A client just included such a 1099c for a rental property less than an hour ago.
                  ChEAr$,
                  Harlan Lunsford, EA n LA

                  Comment

                  • AccTaxMan
                    Senior Member
                    • Apr 2007
                    • 346

                    #10
                    Originally posted by TaxGal
                    A taxpayer completed a short sale on his rental property and received a 1099-C for $33,000 and a 1099-S for $495,000. How do I report the 1099-C? Is it reported on Form 982 and then do I reduce the basis of the property by this amount before computing the gain or loss on the sale? (The adjusted basis of the property is $622,000.) Any guidance would be most appreciated.
                    Not to be rude, I think it's impossible for anyone to walk you through the whole process of how to report a short sale and a Form 1099-C in an internet discussion forum. You should first start with doing your own homework by reading the IRS publications and related tax materials. And then if there are specific issues that you do not understand, you can try to ask them here. If you have no idea at all on how to report a short sale and what a 1099-C is about, you should not have taken the case in the first place.

                    Comment

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