Another 1099-C thread question?

[JJ888]

Tried to search but every situation is different.

Situation: I got 1099-C in the mail for me and my wife for our second mortgage with GMAC. Its noted as cancelation of debt. What should I do with this? I am in the process of doing my 2009 tax return and entered this info. Is this something serious? Is this for informational purposes only? Im halfway on my C7 BK. Any info guys? Thanks!

[JRScott]

Was the 1099 in relation to debt you are seeking discharge from in the bankruptcy?

There is a form to fill out for that but there are some other threads on it. However if its a debt you are discharging it should not count as income for tax purposes.

[catleg]

There should be a check box on the form for bankruptcy. Did they check it?

[aljohnson007]

All you need to do, if it was IIB, is check the bk item on Form 982 (I believe it is item 1a)and file along with your return. Do not include the 1099C amount on your 1040 as it is not taxable.

[JJ888]

Was the 1099 in relation to debt you are seeking discharge from in the bankruptcy?

There is a form to fill out for that but there are some other threads on it. However if its a debt you are discharging it should not count as income for tax purposes.

Yes. Eventhough I don't have a discharge yet, I have to file it with my 2009 tax return as cancelled debt from a primary home. So I don't have to include it as income. I also filled out form 982.

[JJ888]

There should be a check box on the form for bankruptcy. Did they check it?

No check mark. Still awaiting for discharge.

[JJ888]

Since the debt is cancelled on my 2nd mortgage. Does this mean there releasing the lien? On the 1099-C box # 7 where its says fair market value its entered as $0.

Value of the house is about $290K. 1st mortgage is $336K and 2nd is $84K.

[bulletproof77]

Your obligation to pay the second is canceled, however the lien DOES remain on the home..