1099a & 1099c

[ddoshan]

I am stumped at the moment. Client got a 1099A showing debt of 18,100, and FMV of property of 18,100. He also got a 1099C from the same Co. indicating cancelled debt of 18,100.
If the property was worth as much or sold for as much or more then the debt owed on it, why would they also issue a 1099C? If it matters, the foreclosure or abandonment took place in 2012. But both of the forms were dated and issued in 2013.
Can't figure out what to do with this or how to account for on return.
Any suggestions?

[David1980]

Treat it like a 1098-T. In that, treat it like it may well be wrong. Ignoring the numbers on the forms received, what was the real amount of debt outstanding? What was the real FMV of the property?

[RitaB]

That's my situation / What to do, what to do

Same thing here. Taxpayer received both 1099-A and 1099-C. All the numbers are 200K. If the FMV of the relinquished rental is the same as the debt, the lender did not lose anything, the borrower did not gain anything.

I know to figure the gain or loss on the 4797. Got it.

But the 1099-C? If you skip out on credit card debt, you get a 1099-C because you got the keep the $15,000 in shoes, but the credit card company paid for them. You realized a gain of $15,000. The credit card company is out $15,000. This is not that situation at all. The lender got a house worth the amount owed to them on it. They got the shoes, in essence.

So, would you on Form 1040, line 21, enter the 200K as COD then subtract it with a statement "FMV of property acquired by 1099-C issuer is -200K"? I'm afraid to ignore it. And it does not go on 982. Form 982 is used to exclude gain from COD INCOME. There's no income here.

[RitaB]

The Cricket Sounds are Unbearable

Some of you brainiacs help a girl out here.

[S T]

Wish I could lend assistance, but I a in the same predicament with 2 clients in 2013.

Anyone that can lend some guidance, I believe would be appreciated

Sandy

[Gary2]

Treat it like a 1098-T. In that, treat it like it may well be wrong. Ignoring the numbers on the forms received, what was the real amount of debt outstanding? What was the real FMV of the property?

I agree about the numbers looking suspect. (Except about the 1098-T; the box 2 numbers are often correct but always useless.)

[RitaB]

On ATX Unofficial Forum

I posted my query on another forum. Got a lot of BS from somebody who didn't understand and a personal message from somebody else saying:

"In your case, if in fact the loan balance and the FMV are the same, then you are correct and NO 1099-C should have been issued!!

I would put the 1099-C income on a Line 21 detail, then back it off with another line stating "1099-C issued in error; per 1099-A there was NO Cancellation of Debt Income" and also attach copy of the 1099-A as a pdf to the e-filed return."


Maybe this will help somebody.

[DonB]

I would put the 1099-C income on a Line 21 detail, then back it off with another line stating "1099-C issued in error; per 1099-A there was NO Cancellation of Debt Income" and also attach copy of the 1099-A as a pdf to the e-filed return."

I would ask the issuer of the 1099C to issue a corrected one with zero COD. If that fails, I agree with the above advise. Get documentation for a CP2000.