After foreclosure received two 1099a one has a FMV showing $0?

[tjkober]

My question is why GMAC would show a FMV of $0 on their 1099a. We have not filed bk or been notified of any debt forgiveness and the mortgage was in Michigan.

Our original loan was through PNC and they show they acquired to property back on 12-21-09. On 1099 a balance of outstanding principal is $162k and FMV is $183k.

But then we get another 1099 a now from GMAC what shows the same principal of $162k but the FMV is $0. It is my understanding that PNC sold the mortgage to GMAC after they foreclosed but I'm confused as to why I got two 1099 a's and as to why the 2nd shows a FMV of $0.


On both 1099 a forms I am personally liable so can anyone offer any insight?

[BCA2009]

Have you been discharged in BK? If so just fill out Form 982 and select the BK choice.

If you haven't BK'd, is the bank forgiving the deficiency? If they are not forgiving the deficiency ignore the 1099A's. You have no "income" to report.

If you haven't BK'd and the bank is forgiving the deficiency for whatever reason (maybe you are in a non-recourse state). You have to report the income derived from the "forgivness of debt". You can complete form 982 and check the "Qualified Residence" choice.

Upon re-reading your post I see where they checked the box that you are personally liable. That means that they have not forgiven the debt. Ignore the 1099's. They are sent out as informational forms letting you and the IRS know that they have taken the property.

Hope this helps!

[sofarsogood2]

If it was your primary residence or, if the debt was discharged in BK, you are not liable for taxes on the 1099. I think you fill out an IRS form 982.
Not sure from the wording in your post if that was what you are asking about.

[tjkober]

Sorry, my question is why GMAC would show a FMV of $0 on their 1099a. We have not filed bk or been notified of any debt forgiveness and the mortgage (our primary residence) was in Michigan. I appreciate your responses.

[tjkober]

Also, the house has not sold yet.

[BCA2009]

Sorry, my question is why GMAC would show a FMV of $0 on their 1099a. We have not filed bk or been notified of any debt forgiveness and the mortgage (our primary residence) was in Michigan. I appreciate your responses.

The 1099A (the "A" stands for Abandoned) is an informational form. So when property is taken (as in foreclosure) there are required to send out a 1099A. If the debt had been forgiven you would have income. If not forgiven you would have a loss. On personal property (your home) the loss would be non -deductible. But if it were investment property it may be possible have a deductile loss from the foreclosure. The fair market value would be used in certain calculations related to these income/loss situations. Even though there is a space on the form for FMV, they (the Bank) really don't have a clue what the house is really worth. Sometimes they put the original purchase price, sometimes the payoff amount, sometimes who knows where it comes from, and in your case they didn't even bother guessing.

If you were in a situation where you needed the FMV to make a calculation, you would most likely ignore there amount listed on the 1099A anyway and use a more accurate method of determining then FMV.

So to answer your question: they didn't bother filling it in because they didn't know what the FMV was.