1099-A..help

Asked almost 2 years ago - Vineland, NJ

I went to do my taxes...I have a 1099-A and the FMV is 110,000 and I owed 179,000...I did a deed in lieu of foreclosure...Is my debt canceled? The Hand R Block professional believes so...Just have to put it on the return...I also went bankrupt 3 years ago and did and abandonment of property...am I covered?? Confused

Attorney answers (2)

  1. Paula Brown Sinclair

    Contributor Level 20

    3

    Lawyers agree

    Answered . The Form 1099 is used by creditors to report forgiven debt to the IRS because as a general rule forgiven debt is taxable as income. However, there is one and possibly a second exception that will excuse you from reporting it. Your H&R Block "professional" is sadly misinformed. Find IRS Form 982 (available online at www.irs.gov) and read the instructions.

    Best wishes for a favorable outcome, and please remember to designate a best answer.

    This answer is offered as a public service for general information only and may not be relied upon as legal advice.
  2. Diane L Drain

    Pro

    Contributor Level 15

    Answered . In addition to Ms. Sinclair's answer your obligation was discharged in the bankruptcy, therefore under the Internal Revenue Code, Section 108, is not a taxable event. You need to talk with a good CPA to make certain you properly address this matter.

    This firm is in the business of helping people and companies file for bankruptcy protection. Therefore, the... more

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