My client had his house foreclosed. He left his house Fall of 2011. He filed Bankruptcy and put the house in the bankruptcy.
He just now gets a 1099-A. And the housing market in our area is booming so of course the FMV is now higher.
Box 1 is February 17, 2015
Box 2 is $132,165 Balance of principal outstanding
Box 4 is $143,000 FMV of property
Box 5 is not checked so it is NONRECOURSE debt
If I remember right, the sales price is the amount in Box 2 if it is Nonrecourse. Which is $132,165 and his basis is $101,000.
So in this scenario he has a gain but he purposely put it in the bankruptcy so he wouldn't have to deal with any tax consequences.
At the time it was his personal residence so can you take the exclusion of the gain for personal residence?
Or are they looking at the 2/17/15 date?
How do I report this?
Thanks in advance for your help
He just now gets a 1099-A. And the housing market in our area is booming so of course the FMV is now higher.
Box 1 is February 17, 2015
Box 2 is $132,165 Balance of principal outstanding
Box 4 is $143,000 FMV of property
Box 5 is not checked so it is NONRECOURSE debt
If I remember right, the sales price is the amount in Box 2 if it is Nonrecourse. Which is $132,165 and his basis is $101,000.
So in this scenario he has a gain but he purposely put it in the bankruptcy so he wouldn't have to deal with any tax consequences.
At the time it was his personal residence so can you take the exclusion of the gain for personal residence?
Or are they looking at the 2/17/15 date?
How do I report this?
Thanks in advance for your help