What do you do with a 1099-A on your IRS Tax form?

Question

I have a 1099-A on a foreclosed property I'm handling for my mother-in-law. In Box 2, $43000. In Box 4, the FMV is 54000. Do I show the difference as income, loss or nothing?
Thanks,

Answer 1

I agree with the first answer, that you should get with a tax professional, but for different reasons. You can find out how to handle this on your own, and I'll attach the direct IRS link, but a pro will be able to walk you through it with so much less headache. This is what they're there for - so that you can get help with the complex stuff. And, if you decide to file on your own, a reputable service will not charge you for simple advice. (Keep in mind that this might not wind up being simple - but probably will be).
First of all, the "A" on this form stands for Aquisiton or Abandonment of Secured Property. From the information given, it would appear that because box 4 is greater than box 2, you do not have to file it at all. A 1099A is an information return, so it sometimes requires no action. HOWEVER, if you get a 1099 C (cancellation of debt, and yes, you can get both forms for the same property), then the situation may change. I'll reiterate that you should sit down with someone to deal with this. I'd need way more info to give an exact answer, including the type of bankruptcy filed. Ordinary tax prep firms have people trained to deal with this, just call them ahead of time and let them know what you need so you get an appointment with someone who is qualified to handle this. I'd hate to see you go through an attorney who will charge an arm and a leg, when you don't necessarily have to.
If you need more info, or I can be of assistance, please let me know.

Answer 2

Call an accountant. Someone on here could mislead you and then you would have to deal with the IRS.