Rental Property Short Sale

[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.

[AZ-Tax]

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.

[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).

[Possi]

Now, THAT is GOOD!

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!

[RitaB]

Yessss

Clap, clap, clap!

[Possi]

And....

Clap, clap, clap!

the crowd goes WILD!!!

[Gary2]

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.

[RitaB]

Aw, shucks

Don't thank me, thank Mr. Fogel.

Yeah, but we appreciate the Gary that knows how to access Mr. Fogel's docs.

[ChEAr$]

Serendipity. A client just included such a 1099c for a rental property less than an hour ago.

[AccTaxMan]

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.