OK Guys. 1099A but no 1099C

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  • Davc
    Senior Member
    • Dec 2006
    • 1088
    #16
    Originally posted by yakopyan
    I have a situation, where the debt in box 2 is 117K, and the FMV in box 4 is 92K. However, the cost basis in the property is 145K. On one hand you can report this on Schedule D with cost 145 and sale proceed 92. And, of course, the loss in non-deductible. However, do I still need to report the difference between the debt and FMV as an ordinary income. Also, this is a recourse debt. I think he shouldn't report the income, it's going to merely adjust his basis. Could you please confirm?

    thanks,
    If and when the debt is forgiven he will have ordinary income in the amount forgiven.

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      • WhiteOleander
        Senior Member
        • Jun 2005
        • 1370
        #17
        Originally posted by yakopyan
        I have a situation, where the debt in box 2 is 117K, and the FMV in box 4 is 92K. However, the cost basis in the property is 145K. On one hand you can report this on Schedule D with cost 145 and sale proceed 92. And, of course, the loss in non-deductible. However, do I still need to report the difference between the debt and FMV as an ordinary income. Also, this is a recourse debt. I think he shouldn't report the income, it's going to merely adjust his basis. Could you please confirm?

        thanks,
        At this point, there is no forgiveness of debt. It might be forgiven in a future year.
        You have the right to remain silent. Anything you say will be misquoted, then used against you.

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