The FMV is greater than the Bal. of oustanding principal by about 1500. I didn't think about this when I filed my taxes electronically last week. How do you think this will affect it?
2007-02-06 01:32:46 · 2 answers · asked by Rachel W 1 in Business & Finance ➔ Taxes ➔ United States
If I understood it correctly, you don't have to do anything unless they also sent a 1099-C for "cancellation of debt" The cancelled debt is then considered an additional source of income. If I am not right, then I am screwed too
2007-02-06 01:44:58 · answer #1 · answered by Lisa E. 2 · 0⤊ 0⤋
IF the FMV was more than the outstanding principal there's probaby no cancelation of debt income. The foreclosure is treated as a sale so there could be an issue of gain on sale of a personal residence if you don't qualify for the exclusion of gain (lived in it for 2 of the 5 years prior to sale as your principal residence.)
2007-02-06 01:46:04 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋