My question involves bankruptcy in the state of: Nevada
My question involves a foreclosure in the State of: Nevada
Filed Chapter 7 in 9/07; Real Property included in Chapter 7 Bankruptcy; Principal Balance, Back Payments, Interest, Legal fees plus more was included for a total of approximately $650,000; Notified bank of property being vacant on 11/16/07; Returned gate key and house keys at that time via Federal Express; Bank foreclosed on property 1/28/08; all debts included in bankruptcy was discharged on 3/24/08; Received 1099 A on March 1, 2008; The principal
balance shows as $576,000 and the fair market value shows as $639,753.28; The property was actually purchased by the lender for the amount owed; When I contacted the bank they tell me that was the fair market value of the property; However, the definition of fair market value is the price that a given property or asset would fetch on the open market; The actual market value of property at the time of foreclosure was approximately $450,000; In fact in September 2008 they sold the property for $425,000. Do I owe taxes on the difference between $576,000 and $639,753.28 although the debt was discharged in bankruptcy. What do I need to do in regards to my tax return this year?