Client sold home for 150,000 with mortgage of 162,000 basis in home was 190,000+/-. Bank cancelled the debt of 12,000 and client doesn't know if 1099-C was issued, and whether or not it was shouldn't make a difference.
Unless they are insolvent, would they have taxable income of $12,000 or would it be considered part of the "sale price" or somehow basis reduction? It was not foreclosed - it was a sale.
I think I'm grasping here maybe someone could help me think clearer?
Unless they are insolvent, would they have taxable income of $12,000 or would it be considered part of the "sale price" or somehow basis reduction? It was not foreclosed - it was a sale.
I think I'm grasping here maybe someone could help me think clearer?
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