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  1. #1
    Join Date
    Feb 2010

    Default 1099a and Fair Market Value

    My question involves a foreclosure in the State of: California

    I am in the same boat as a previous post in that I have recieved a 1099 A and no 1099 C. I issue I have is that on the 1099 a it states the outstanding balance on the loan at $306,000, and lists the fair market value as $337, 587.
    How can this be? Last year at foreclosure they auctioned the house and it sold for $120,00, thwen within the last 8 months the company that purchased the home at auction, sold it for $169,000. so where the heck are they coming up with the fair market value of $337,000. I talked to the lender who sent me the 1099 they said I had to subtract the outstanding debt from the FMV, and that was what i had to clain as income on my taxes. Whats going on here ? Any help

  2. #2
    Join Date
    May 2009

    Default Re: 1099a and Fair Market Value

    FMV does not mean market price - the price it actually sells for. FMV can be calculated by using nearby home sale comparisons (market-data method), or can be by replacment-cost method.

    I suspect they used the replacement-cost method since in this market, homes are selling well below their replacement-cost.

    Btw, the 1099-A FMV will NOT be used for tax purposes except to report a sale, and possible capital gains - see other post.

    What you will have to claim for income tax will be whatever amount of cancellation of debt they wrote off when they send you the 1099-C. If the home was your primary residence, then the debt cancellation will be exempt from federal/state income tax.

  3. #3
    Join Date
    Feb 2010

    Default Re: 1099a and Fair Market Value

    Well that sounds lke a good thing, cause as of right now, they still have not sent me a 1099C

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