1099a After Foreclosure on Rental Property

[caramelmaki]

My question involves a foreclosure in the State of: California

I have a foreclosure on my rental property. The lender sent me a 1099A. The outstanding balance is more that the fair market value. How do I figure out if I have a gain or loss?

I was told that I have to wait for the lender to send me a 1099C?

I am really confused.

[Mr. Knowitall]

Start here.

[llworking]

My question involves a foreclosure in the State of: California

I have a foreclosure on my rental property. The lender sent me a 1099A. The outstanding balance is more that the fair market value. How do I figure out if I have a gain or loss?

I was told that I have to wait for the lender to send me a 1099C?

I am really confused.

Because this is investment property I am going to strongly recommend that you get a tax professional on board to help you with this one. Tax law has been in a bit of a flux on this particular issue and research will be needed to ensure that it is handled properly.

You don't need a tax attorney or a very high priced CPA, you just need someone with experience in dealing with these kinds of issues and who can do the necessary research.

The last research I did on this particular issues was several years ago. At that time I would have told you that the 1099-A represented the mortgage company buying the house back from you at fair market value, and that you should book the loss on Schedule D at that time, as the difference between the fair market value and your basis.

You would eventually have to deal with the cancellation of debt income when the 1099-C is issued.

Its likely that the same advice would be relevant, but I honestly think that you need a tax professional to reseach it NOW, to be certain.