Does Utah allow recourse loans?

Question

I know someone who had their mortgage foreclosed upon and received a 1099A for the difference. Their tax accountant said that Utah is a non-recourse state. Is that true?

Answer 1

It actually does not matter for tax purposes. A non-recourse loan means they cannot collect more that the value of the collateral. That means, after they sell the house, they can't collect the deficiency. The 1099-A shows the amount of debt forgiven. That amount is considered taxable income by the Federal government. If Utah is a non-recourse state, that is why you received the 1099-A instead of a bill for the amount shown.