another FORM 1099A

[luke]

t/p received FORM 1099A (NO 1099C yet) for a rental property that bank sold as short sale -
Box2 $179K (bal of outstanding prin)
Box4 FMV = $249K
Box 5=chk personally liable
After using worksheet in Pub 4681 looks to me like NO gain or loss
What say you guys?

[David1980]

Table 1-1 in pub 4681?

Line 1: debt immediately before transfer of property $179k (assuming all debt is included in principal)
Line 2: FMV of transferred property $249k
Line 3: Ordinary income from COD, line 1 subtract line 2 limited to $0 = $0
Line 4: Smaller of 1 or 2, $179k
Line 5: Proceeds received from foreclosure sale - probably $0?
Line 6: Add lines 4 and 5 = $179k
Line 7: adjusted basis of transferred property = ? What's the value?
Line 8: Gain or loss, line 6 subtract line 7 = ? depends on line 7

Seems that unless the basis in this property just happens to be $179k exactly you're going to have gain or loss on the disposition of the asset.

[luke]

Thanks

David 1980 - Thanks - it always helps to READ the FORM - thanks again!