1099-a

[bgiez]

client received 1099-A , recourse debt, box 2 balance of principal outstanding ($232K) is less than box 4 fair market value (252K). Per client, both figures are greatly overstated. She also believes property has been sold for approximately $90k. No 1099-C has been received.

According to the instructions, if the situation was reversed, fmv less than principal outstanding, there would be cancellation of debt income.

What do I do with this 1099-A. My brain is fried.

[Lion]

Your client sold the property to the mortgage holder. Report the sale in the usual place such as Schedule D or Form 4797 or where ever depending on the use your client made of the property.

[bgiez]

Duh! (smacks head)

Your client sold the property to the mortgage holder. Report the sale in the usual place such as Schedule D or Form 4797 or where ever depending on the use your client made of the property.

Thanks! Why didn't I remember that?

In my defense, this year I switched to Drake (which I love) after using Taxworks for 10 years. And I'm on a new operating system. And I'm getting older. And I'm really annoyed with our elected officials for delaying things. And...need I go on.

[Bill Tubbs]

You're not alone...

Thanks! Why didn't I remember that?

In my defense, this year I switched to Drake (which I love) after using Taxworks for 10 years. And I'm on a new operating system. And I'm getting older. And I'm really annoyed with our elected officials for delaying things. And...need I go on.

bgiez,

Thanks for posting your question -- it's been a couple years since I got a 1099-A so I searched and found your thread. I also switched to Drake this year (from ATX about Jan 15th!) so am still trying to figure some things out with the software.

Bill

[Burke]

I got a 1099-A this year from a client in which the FMV is listed as $99,581.32. Now how did they come up with that odd amount? (Outstanding debt was $80K). It was a deed-in-lieu-of-foreclosure situation. Does that mean they sold the property for the $99K figure and are keeping the balance of the funds? They did start paying everything after the DILOF was signed, including HOA dues, etc. etc.

[RightOn]

I actually have a similar question. Is there any special situation that the lender only needs to issue a Form 1099-C, but not 1099-A, for a foreclosed property?

[mactoolsix]

I actually have a similar question. Is there any special situation that the lender only needs to issue a Form 1099-C, but not 1099-A, for a foreclosed property?

When the FMV is less than the amount owed, and the difference is over $600 or something like that, then there is reportable COD.

Notice in the above examples, the FMV was more than the debt, and for some reason the T/P abandoned the property. The bank sells for FMV, pays off the loan (no remaining debt, thus no 1099C) and then what they do with the remaining cash???

Mike