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  1. #1
    Join Date
    Feb 2010
    Posts
    5

    Default I Received a 1099-A Instead of a 1099-C

    I am in the same exact situation

    My home was recently foreclosed by the bank and sold at auction on 7/14/2009. I however moved out of my home before foreclosure in 2/2009. I have recenty received a 1099-A from the bank instead of a 1099-C. Did I received a 1099-A instead of a 1099-C because I move out before getting evicted? Can I still qualify for the Governmet Mortage Forgiveness and file a form 932 with a 1099-A? Based on the information that i am reading online, there appears to be a lot of mixed answers and according to a H&R rep she advised me to contact the bank to attempt to get a 1099-C or I may not be able to apply for the 932 and have to file insolvency of debt instead, is this true? It is imposible for me to pay taxes on a difference of $150,00 between the outstanding principle and Fair market value listed. Does any one know anything about capital gains? I read somewhere where someone mention you can write off up to $250,000 in capital gain, so if one has to claim the difference as income on their taxes, can they write off the difference as capital gain? Any help or knowledge that anyone can give will be greatly appreciated. I am so confused and stressed.

  2. #2
    Join Date
    May 2009
    Posts
    28

    Default Re: 1099a

    You have to wait for the bank to send you the 1099-C before you can claim/declare it on your taxes. Because of delays, you probably will not receive the 1099-C from the bank this tax year.

    File your current taxes using 1099-A on Schedule E as a sale of the property and calculate any potential capital gains accordingly.

    When you receive the 1099-C in the future, you then file form 982 so that the debt cancelled is exempt from any personal income tax.

    @Pleasehelp - the bank sent the 1099-A as the formal declaration of foreclosing on the home. They won't send you the 1099-C until they've cancelled the debt - which they will since it was a non-judicial foreclosure in California on a primary residence. Your moving out of the home has no bearing on the 1099-A or 1099-C. You will not have to pay any income tax on any cancelled debt up to 1 million for single since it was your primary residence.

  3. #3
    Join Date
    Feb 2010
    Posts
    5

    Default Re: 1099a

    Thank you Solara1973 for your response and the information that you have provided for me, you have clarified a lot of things for me. A couple more questions that I hope you can help me with.

    I have spoken to the bank and they have confirmed that I will not be getting getting a 1099-C anytime soon, they did say that it may be a possibility in the future. Since it is CA and my loan was an original purchase loan then they will have to eventually issue me a 1099-C right?

    The 1099-A that i have received has the box "Was borrower personally liable for repayment of the debt" checked "Yes" though, not sure if this is good or bad. However, the Fair Market value is $150 thousand less then the Balance of principal outstanding so there shouldn't be any capital gains right?

    If you can shed anymore light in my delimma, I really appreciate it.

  4. #4
    Join Date
    May 2009
    Posts
    28

    Default Re: 1099a

    Yeah, no capital gains but you still have to file the Schedule E as a sale of the home.
    Now TECHNICALLY they should NOT be giving out a 1099-C because California purchase-money loans are considered non-recourse, and a foreclosure on a non-recourse loan does not cause cancellation of debt income. But banks are dumb, and so will send one anyways as a matter of routine - and the 'Yes' box being checked really doesn't mean much - technically again, it should say 'No' since the loan is a non-recourse loan.

    If the home was your primary residence at the time of foreclosure, then the debt cancelled will not count towards income taxes.

  5. #5
    Join Date
    Mar 2010
    Posts
    4

    Default Re: I Received a 1099-A Instead of a 1099-C

    1099A just means that you no longer have possession of the home, it states the FMV and the date the bank took over possession and your remaining balance. You cannot file your taxes with that as it does not mean the bank is forgiving your debt.
    You do need to file the sale of home, but it is not a Sch E, sch e is rental income form

    1099 C means the bank cancelled your debt and you may be able to exclude it all from income either by doing the 982 or proving your insolvency.

    If you are not going to receive a 1099 C, do not estimate it on your taxes because the bank may try to sue you, and that is the reason they will not issue you a 1099C, they are not forgiving your debt.

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