How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask CGCPA Your Own Question

CGCPA
CGCPA, CPA
Category: Finance
Satisfied Customers: 3740
Experience:  40+ years experience in taxes and financial planning
50756543
Type Your Finance Question Here...
CGCPA is online now
A new question is answered every 9 seconds

I do not see a catergory for tax attorneys or CPA

Customer Question

I do not see a catergory for tax attorneys or CPA?
Submitted: 3 years ago.
Category: Finance
Expert:  CGCPA replied 3 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

You have found it. Many of us in this section are either CPAs, tax attorneys or Enrolled Agents. We are here to help with tax and finance questions. Please go ahead and ask. If your query falls outside my area of knowledge I will opt out so another can help you.

Customer: replied 3 years ago.
I have not ask the question yet
Expert:  CGCPA replied 3 years ago.
Agreed, please feel free to ask at any time.
Customer: replied 3 years ago.

I had homes closed foreclosed on in 2010 and received 1099 c from Wells Fargo

I renovated these homes between 2005 & 2007 spending $1,100,000.00. borrowing 107,000.00 on each one they appraised for $135,900.00 in July of 2007 could not sell them attempted to rent them and half of the renteres failed to pay their rent, it was a most difficult time form 2000 to 2010. I attempted to get wells fargo to modify the loan to No avail they were charging me 7% interest if they would have just lowered it to 5% I could have made it work. now my CPA says I owe $50,000.00 tax. I lost my home and everything and currently living with my son (I am 73 years of age and live on SS). My CPA says I am not insolvent because a LLC that I have owns a building free of debt. I personally do not own anything except my car.

Is there anyway to not have to pay tax on those 1099 C's. The community bank that intiated the loans went out of business shortly after my loans were closed and sold them to wells Fargo, it was a shady deal.

thank YOU

Dewey Link

Expert:  CGCPA replied 3 years ago.

Hi Dewey,

You seem to be in a very difficult situation. If you do not do something it will only get worse. The problem is that these properties do not qualify for the exclusions available for home owners who live in their properties. They do appear to qualify for the exclusion for business obligations canceled. Here is a piece from the IRS. While it mostly deals with home owners/occupiers it also addresses qualified real property business indebtedness. It also provides links to other useful information. Perhaps your CPA is not aware of this. Print a copy and speak with him about it. Your other option is to file bankruptcy under Chapter 11 which automatically excludes the cancellation of debt income and can permit you to keep the LLC property.

Topic 431 - Canceled Debt - Is it
Taxable or Not?

In general, if you are liable for a debt that is canceled, forgiven, or
discharged, you must include the canceled amount in gross income unless you meet
an exclusion or exception. However, canceled or forgiven debt is not considered
income if it is intended as a gift or bequest.

A debt includes any indebtedness for which you are personally liable or for
which you are liable only to the extent of the property securing the debt.
Cancellation of all or part of a debt that is secured by property may occur
because of a foreclosure, a repossession, a voluntary return of the property to
the lender, abandonment of the property, or a principal residence loan
modification. You must report any taxable amount of a debt that is canceled, as
ordinary income from the cancellation of debt, on Form 1040 or Form 1040NR and
associated sub-schedules, as advised in IRS Publication 4681, Canceled Debts,
Foreclosures, Repossessions, and Abandonments (for Individuals)
.

Caution: If
your debt is secured by property and that property is taken by the lender in
full or partial satisfaction of your debt, you will be treated as having sold
that property and may have a reportable gain or loss. The gain or loss on such a
deemed sale of your property is a separate issue from whether any canceled debt
also associated with that same property is includable in gross income. See IRS
Publication 544, Sales and Other
Dispositions of Assets
, for detailed information on reporting gain or
loss from repossession, foreclosure or abandonment of property.

If a federal government agency or an applicable financial entity cancels or
forgives a debt you owe of $600 or more, you should receive a Form 1099-C (PDF), Cancellation of
Debt
, showing amounts and other information relating to the
cancellation. The amount of canceled debt is shown in Box 2 of the form.
Taxpayers may also receive a Form 1099-A
(PDF), Acquisition or
Abandonment of Secured Property
.

Canceled Debts that meet the requirements for any of the following exceptions
or exclusions are not taxable.

Canceled Debt
that Qualifies for Exception to Inclusion in Gross Income:


  1. Amounts specifically excluded from income by law such as gifts or bequests
  2. Cancellation of certain qualified student loans
  3. Canceled debt that if paid by a cash basis taxpayer is otherwise deductible
  4. A qualified purchase price reduction given by a seller

Canceled Debt
that Qualifies for Exclusion from Gross Income:


  1. Cancellation of qualified principal residence indebtedness
  2. Debt canceled in a Title 11 bankruptcy case
  3. Debt canceled due to insolvency
  4. Cancellation of qualified farm indebtedness
  5. Cancellation of qualified real property business indebtedness

The exclusion for "qualified principal residence indebtedness," provides
canceled debt tax relief for many American home owners involved in the mortgage
foreclosure crisis currently affecting much of the country. The exclusion allows
taxpayers to exclude up to $2,000,000 ($1,000,000 if married filing separately)
of "qualified principal residence indebtedness".

Generally, if you exclude canceled debt from income under one of the
exclusions listed above, you must also reduce your tax attributes (certain
credits, losses, and basis of assets) by the amount excluded. You must file Form 982 (PDF), Reduction of Tax
Attributes Due to Discharge of Indebtedness (and Section 1082 Basis
Adjustment)
, to report the exclusion and the corresponding reduction of
certain tax attributes.

Refer to Publication
4681
, Canceled Debts,
Foreclosures, Repossessions, and Abandonments (for Individuals)
, for
more detailed information regarding taxability of canceled debt, how to report
it, and related exceptions and exclusions. Additional information can also be
found in Publication 525, Taxable and
Nontaxable Income
.

CGCPA, CPA
Category: Finance
Satisfied Customers: 3740
Experience: 40+ years experience in taxes and financial planning
CGCPA and 2 other Finance Specialists are ready to help you
Expert:  CGCPA replied 3 years ago.
Thank you for the opportunity to assist you.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
< Last | Next >
  • http://ww2.justanswer.com/uploads/RA/rakhi.v/2012-7-3_14374_RakhiVasavadaL.64x64.jpeg Rakhi Vasavada's Avatar

    Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    1890
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    1755
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg JKCPA's Avatar

    JKCPA

    CPA

    Satisfied Customers:

    838
    Bachelors degree and CPA with Accounting experience.
  • http://ww2.justanswer.com/uploads/starside8/2010-2-16_55433_DSCN1175.JPG Eric's Avatar

    Eric

    Financial Manager

    Satisfied Customers:

    558
    Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
  • http://ww2.justanswer.com/uploads/FA/fastfile/2011-12-15_23139_Klein2011small.64x64.jpg R. Klein, EA's Avatar

    R. Klein, EA

    Accountant

    Satisfied Customers:

    397
    Intuit Ask a Tax Expert. QuickBooks Certified Pro Advisor (all editions)
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    324
    NASD Licensed Rep, 1997-2001, Business Attorney
 
 
 

Related Finance Questions