Client got a 1099-C from BOA on a short sale in 2013 where the amount discharged was 103,468 but the HUD statement shows a mortgage payoff of only 67,734. I'm awaiting confirm from client, but I assume the difference is late fees and interest. Anything unusual about this? thanks.
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There is no difference, because you add, don't subtract: 67,734 (payoff) + 103,468 (CODI) = 171,202 (Balance on loan before short sale). You won't see the $171,202 on the 1099-C, and there maybe some variance due to other costs and fees. Check with your client to see if this makes sense.
If there were a 1099-A, you'd see the principal balance, but I don't believe one is required for a short sale. Nor is the FMV in box 7 on the 1099-C required, but if it's there, it should correspond closely to the $67K payoff.
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