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Discussion Forum Index --> Basic Tax Questions --> 1099- A ?
Discussion Forum Index --> Tax Questions --> 1099- A ?
Ikes (talk|edits) said:
| 23 February 2008
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| I have a couple that lost their house due to non payment because of medical reasons. They have received a 1099 A but no 1099 C . Box 4 is less then box 2. Does this have to be included in income or is their any way they can exclude this from income. ( like sale of primary residence)
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Ikes (talk|edits) said:
| 23 February 2008
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| No I dont believe so. The house is dtill standing and i do believe they can sell it
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Ikes (talk|edits) said:
| 23 February 2008
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| I meant the house is still standing
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Ikes (talk|edits) said:
| 23 February 2008
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| Sorry have not had to many of these .... They have lived in the house for at least 4 yrs that i know about maybe even more.
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Riley2 (talk|edits) said:
| 24 February 2008
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| Look at the 1099-A to determine if the client was personally liable for the mortgage. If the answer is no, then the entire balance on the mortgage is treated as the sales price, and there is no COD income.
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Ddoshan (talk|edits) said:
| 24 February 2008
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| If box 4 (FMV) is is less than box 2 (outstanding principal) then they would have income to report. Assuming it is a recourse loan which most are.. check box 5 for that. They may be able to exclude this income if they were insolvent by using form 982. They also may be able to exclude this income via the new mortgage relief act provisions which is also done via form 982. In any case, it is a sale of the property. They may or may not have a gain. Depends on what there cost basis is. If a gain then section 121 would most likely apply and they could exclude the gain.
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