Discussion:1099-A for Foreclosure and Form 1041
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Discussion Forum Index --> Advanced Tax Questions --> 1099-A for Foreclosure and Form 1041
Discussion Forum Index --> Tax Questions --> 1099-A for Foreclosure and Form 1041
| 23 February 2008 | |
| I'm a CPA, but have very little 1041 experience, so bear with me. My father-in-law died in 2006. His home had a mortgage of $80,000. His basis was $90,000. No one used the property after his death. Shortly after his death we had the house appraised. Appraisal said value was $90,000. Since there was little to gain after expenses and home was out-of-state making it difficult to deal with a sale, we let it foreclose.
We received a 1099-A reflecting balance outstanding of $80K and FMV of $120K. Borrower was personally liable. I've read other discussions about 1099-A and estates and it seems an argument can be made that the house is not a personal residence for the estate or the beneficiary so that the loss is deductible. But since the house was foreclosed and never held for sale, that might be a difficult argument to make. Any thoughts? If I take the position that the loss is deductible, what value would I use for the "sales price"? The FMV of $120K from the 1099-A, or the $90K from the appraisal? If I don't take the loss, do I need to include a Schedule D with the Form 1041, or do I not report anything from the 1099-A on the return? | |
| 23 February 2008 | |
| I wonder how the appraisal of 90K at DOD could be so far off from the mortgage company's valuation of 120K? | |
| 23 February 2008 | |
| I thought that was strange also. I don't know what they auctioned the house for, but it's currently listed for sale at $82K. | |
