Got a 1099-A, No 1099-C Yet, for a House Sold Last Year

[BuffaloDragon]

I got a 1099-a from my first. I checked to see who currently owns the house and the bank sold it to an individual in sept of 2009. Will I get a 1099-c for sure? and if I am giong to get it, won't I get it anytime soon since the house was sold in 2009? I have a huge loss on what I owe and the FMV. I am obviously very concerned.

[BuffaloDragon]

I got a 1099-A from the first on a home we gave up in CA. I checked with the assessor's office and the house sold in Sept of '09. So will i get a 1099-C for sure? and would they have to give it to me this year or is there a possibilty I won't get it until next year? We currently reside in KS

[Mr. Knowitall]

This was due to the foreclosure of your principal residence?

[solara1973]

If the home was your primary residence at the time of foreclosure, then the cancellation of debt will be exempt from income tax through the Mortgage Relief Act.

Since the principal owed is more than the FMV, you will receive a 1099-C once the bank cancels the debt - since it was foreclosed on in California, they will have to cancel the debt and cannot go after any remaining balance/deficiency judgment. When they will send that 1099-C is up to them. Since it sold in Sept 09, they really should have just sent out a 1099-C already, and not bother with the 1099-A. They probably won't be sending one out for this tax year, and you will likely have to report it on next year's income tax.

Again, key question is whether you lived in the home at the time of foreclosure. If you did NOT, you can still get exempted from income tax on the cancellatino of debt if you can prove insolvency at the time of foreclosure (total assets less than total liabilities), or you go through bankrupcy. If the loan was a non-recourse, then you are also exempt from income tax (Box 5 on the 1099-A should say no for non-recourse, and yes for recourse).

[Taxchic]

Not all loans in CA are non recourse, you are not always in the clear. I foreclosed on my home in 2008, and the bank sold it in 2009. 2009 is when the bank should have issued me a 1099C for my first and second mortgage because that is the year in which they realized their exact loss on the property, my bank however will not issue a 1099C, I don't know if they can in future years, because if they did not issue it, it means they did not write off the loss, which means they might try to sue me. Because I refi'd and had a second, they can. I guess it's just a waiting game now.

[jmac123]

Again, key question is whether you lived in the home at the time of foreclosure. If you did NOT, you can still get exempted from income tax on the cancellatino of debt if you can prove insolvency at the time of foreclosure (total assets less than total liabilities), or you go through bankrupcy. If the loan was a non-recourse, then you are also exempt from income tax (Box 5 on the 1099-A should say no for non-recourse, and yes for recourse).

Hi Solara1973,

I was wondering if you have any more details for what you mean by living in the home at the time of the foreclosure. I haven't seen it stated like that on the IRS website.

I received notice of a trustee sale that would take place on a certain date/time. So, not wanting to be homeless, I moved out that weekend. After living in my new place for a couple months, and not hearing anything, I found out that the trustee sale had been postponed without my knowledge. After informing them I had already moved out, they changed the locks, and promptly held the trustee sale. So the trustee sale in actuality took place about two months after the notice I received said it would, and two months after I moved out. What impact do you think that will have?

Also, when is a foreclosure finalized? My credit report has said "Foreclosure Initiated" for like 8 months now, even though the trustee sale was held long ago and somebody new has been living there for a while now. =)

Thanks!

[ttsmith]

Hello,

Anyone with the update on the this post and what jmac123 posted above?
many of us are in the same situation
please guide

Jmac123 you were in this situation last year. can you please guide how did you handle or steps you followed.
I am in exact situation in california.

please help guide.
thanks