1099-a

[gregp]

Hi,
My house was foreclosed in 2010. I also know it was put back on the market and sold this same year.
Anyway, I received a 1099-A form from the bank (I had only one loan on this house which was my main residence).
the remaining balance (box 2) is lower than Fair Market Value (box 4).
In this case, my understanding is that I will never receive a 1099-C form.
Box 5 is checked.
How do I know if I still owe something or not to the Bank?
Can I move over?
Thanks,
Greg

[HHM]

Here you go

http://methnerlaw.com/2011/02/06/irs-form-1099-a-and-1099-c-after-bankruptcy-what-do-i-do/

[tobee43]

the 1099c's are usually issued from the credit card companies...while the 1099a's are for the home deficency....

have your account fill out a form 982 and it will be fine.

under the Mortgage Forgiveness Debt Relief Act...you will owe nothing if this was during your bk etc.

[HHM]

the 1099c's are usually issued from the credit card companies...while the 1099a's are for the home deficency....

have your account fill out a form 982 and it will be fine.

under the Mortgage Forgiveness Debt Relief Act...you will owe nothing if this was during your bk etc.

No, 1099-A and 1099-C are different forms. If there a deficiency on a mortgage, there will be a 1099-C. A 1099-A is for reporting a gain or loss on sale of an asset.

[tobee43]

yes, i thought i did understand that....LOL!!!!!!!!!! i have seen a 'c'...was for amounts the banks charged in a loss in credit card issues that ended up eating.......while i have seen the 1099a from the mortgage banks....... real estate (short sales and deficiencies)....and i have seen 1009s for capital losses....and G's for government non taxable amounts....LOL!!!!
i also extra checked in out this year since i haven't work with one myself in about 5 years and wanted to be as clear as possible...if THAT is ever possible for me..

actually i must say...i have seen 1009's issued by the companies and they don't send the "correct" one...

thanks for the site and clarification.

[tobee43]

hhm...that was so good it should be out there....i'm certain many are or have been rec'ing them since it's tax tiem.

"IRS Form 1099-A and 1099-C After Bankruptcy, What Do I Do?

I have written on this topic before (here), but with tax time approaching and 2010 being a near record year for bankruptcy and foreclosure, it is time to re-visit the tax reporting and implications related to mortgage debt after bankruptcy.

Let’s set the stage: you (the debtor) received a bankruptcy discharge in 2010 and as part of that process surrendered your home (allowed it to foreclose or short sold). The mortgage lender, following IRS guidelines, may send you 2 forms related to that event.

The first form is the 1099-A. The 1099-A records that a sale of real estate occurred (a potentially taxable event). From your perspective, the 1099-A is used to determine if there is a taxable gain or loss. Before you get your hopes up, you do not get to write off the loss from a foreclosure or other abandonment of real estate. At the end of the day, there is nothing you need to do with a 1099-A relative to your taxes if the 1099-A is from a foreclosure and you received a bankruptcy discharge. The 1099-A is simply a reporting document letting the IRS know that a disposition of real estate occurred. To find out more, review IRS Publications 544 and 4681 (links open PDF from www.irs.gov) but no action is required on your part.

The more important form you may receive is the 1099-C Cancellation of Debt. The 1099-C records when a bank, truly, forgives a debt (writes off with no intent to collect; don’t confuse debt forgiveness with “charge off” on your credit report, they are not the same thing). In the normal course, the IRS treats forgiven debt as income. In this real estate climate, it is exceedingly rare that a bank’s loan is fully paid from a foreclosure sale meaning that there is a deficiency balance still owed (the difference between what you owe and the proceeds received from the sale). If you received your bankruptcy discharge, you are not liable for that deficiency balance and therefore not liable to pay income tax on the deficiency. However, the bank may still issue the 1099-C. If you receive a 1099-C after bankruptcy, you MUST complete IRS Form 982 with your tax filing. If you received your bankruptcy discharge, you would check box 1(a) on Form 982 and send it in with your tax filing, and that will be the end of it. If you don’t, you will be hearing from the IRS and have several weeks of headache trying to sort out the issue.

So, in the normal circumstance, no action is required on a 1099-A when the property was foreclosed or otherwise abandoned. However, if you receive a 1099-C you need to file IRS form 982 to show the IRS that you don’t owe tax on the deficiency."

[discouraged]

Thank you tobee. I copied that one and put it into my bankruptcy file. Good to know.

[gregp]

Hi,
I appreciate answers but please don't jump on everything.
I have a 1099-A only. I don't have and will never have a 1099-C.
I also never filed for BK.
All I did is lose my job, move to another country to get a job, try to sale the house, fall behind payment, get the house foreclosed, and received the 1099-A.
My question is just: is this nightmare over? Or do I still owe money to the bank or IRS?

[tobee43]

Thank you tobee. I copied that one and put it into my bankruptcy file. Good to know.

welcome!!

[tobee43]

Hi,
I appreciate answers but please don't jump on everything.
I have a 1099-A only. I don't have and will never have a 1099-C.
I also never filed for BK.
All I did is lose my job, move to another country to get a job, try to sale the house, fall behind payment, get the house foreclosed, and received the 1099-A.
My question is just: is this nightmare over? Or do I still owe money to the bank or IRS?

this is from one of my blogs...in reference to the 1099A specifically..........


What to Do With Form 1099-A?










6 Comments

by
tobee43




on 01-04-2011 at 09:30 AM (697 Views)


What to Do With Form 1099-A?


Saturday February 27, 2010


When a house is foreclosed upon by the bank, the owners typically receive Form 1099-A from the lender showing several pieces of relevant information. The information on Form 1099-A will likely be needed to report the foreclosure properly on your tax return. A foreclosure is treated as the sale of property, and the former property owner will need to calculate their gain or loss on the property. But unlike a normal sale, there's no "selling price," and this is where the Form 1099-A comes into play. What to do with the information found on Form 1099-A has been asked by a number of readers, including "IcelandorBust," who posted this query on the message boards:

"Our home was foreclosed on in July 2009. The bank sold it to a new owner in November 2009. We received a 1099-A in January. We have not received a 1099-C. I have been unable to find a concrete answer as to what to do with the 1099-A."

Under the rules for calculating the tax consequences of a foreclosure, the taxpayer will need figure out the "selling price" so that gain or loss can be calculating. Depending on the type of loan, the taxpayer will utilize either the fair market value of the property or the outstanding loan balance on the property for the selling price. Both of these figures are reported on Form 1099-A. The outstanding loan balance is found in Box 2; the property's fair market value is found in Box 4. The date of the foreclosure is indicated in Box 1, and this will be used as the date the property was disposed of (that is, the "sale date"). Taxpayers will also need to know if the loan was a recourse or a non-recourse loan; the loan was probably a recourse loan if the bank has checked "yes" in Box 5 which asks "Was borrower personally liable for repayment of the debt?"

People might receive multiple Forms 1099-A (one from each lender) for a single property. People might also receive Form 1099-C instead of Form 1099-A if the lender both foreclosed on the property and canceled any mortgage debt for which the borrower was personally liable.

Gain or loss is reported on Schedule D for homes that were personal residences. As a reminder, the IRS does not allow people to claim a loss on personal residences. Any gain (and I have seen situations where a foreclosure results in gain being reported) on personal residences can be offset by the capital gains exclusion for a main home.

http://taxes.about.com/b/2010/02/27/...orm-1099-a.htm

once again, it has been my experience that you are done....because of the Mortgage Forgiveness Debt Relief Act.

[tobee43]

p.s.


i would still seek an excellent accountant if you are not certain....i am only giving you my personal experience and certainly not legal or any other type of advise....for what's it's worth.

good luck!

[gregp]

Thanks tobee43.

I agree that it would not make sense to have this "Mortgage Forgiveness Debt Relief Act and Debt Cancellation" mostly for 1099-C, and having troubles with a 1099-A only since the FMV is higher than remaining balance (meaning the Bank could have make money on me!).
I might ask to the attorney who foreclosed my house, but I kind of always fear saying "hey, I'm still alive!".

[tobee43]

Thanks tobee43.

I agree that it would not make sense to have this "Mortgage Forgiveness Debt Relief Act and Debt Cancellation" mostly for 1099-C, and having troubles with a 1099-A only since the FMV is higher than remaining balance (meaning the Bank could have make money on me!).
I might ask to the attorney who foreclosed my house, but I kind of always fear saying "hey, I'm still alive!".

yes, i hear you on that...however, actually, i would consider the expertise of an accountant in this matter as opposed to an atty...don't get me wrong..i love attys....LOL!! however, while there are many atty's somewhat versed in this type of situation.... i have worked for a some....and know of.many that cannot balance their check books...hence the accountants....which deal with these types of situations all the time. (BUT they were excellent attys!!).

keep us posted as to how you do with it!