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LawTalk
LawTalk, Attorney
Category: Real Estate Law
Satisfied Customers: 36350
Experience:  I have 30 years legal experience. Additionally, in CA I held a Real Estate Broker's license.
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I MOVED TO FLORIDA IN 2005 BOUGHT A HOUSE MOVED BACK TO MD

Customer Question

I MOVED TO FLORIDA IN 2005 BOUGHT A HOUSE MOVED BACK TO MD IN 2007 PUT FL HOME FOR SALE DIDNT SELL GOT FORECLOSED IN 2010 RECEIVED A 1099A 4 YEARS GO BY JUST RECEIVED A 1099C FOR 49,000. received the notice may of 2015 after i had filed my taxes but the 1099 is a 2014 with the event date 2014
Submitted: 1 year ago.
Category: Real Estate Law
Customer: replied 1 year ago.
What do I do? Ammend the return or wait for the Irs to contact me..Would I be eligible under the mortgage debt relief?
Customer: replied 1 year ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 1 year ago.
no i want an online answer..its been 10 minutes how long does it take
Expert:  LawTalk replied 1 year ago.

Good afternoon,

I'm Doug, and I'm very sorry to hear of your situation. My goal is to provide you with excellent service today.

As you have asked for a phone call, I will offer you that and I will process that offer to you after I get this posted to your question thread.

After you accept my offer of the phone call, would you please provide your phone number in the box entitled "Enter contact info"? After you do that, please send me a quick Reply to let me know that you have posted the number, so I can call you.

Thanks in advance,

Doug

Customer: replied 1 year ago.
i dont want a phone call i want an online answer
Customer: replied 1 year ago.
are you there
Customer: replied 1 year ago.
hello Doug are you there
Expert:  LawTalk replied 1 year ago.

Hi, I am here.

Expert:  LawTalk replied 1 year ago.

Please be patient. In a call you have my 100% full attention. But on this page I am helping more than pone person at a time.

Customer: replied 1 year ago.
could you answer my question please online
Expert:  LawTalk replied 1 year ago.

Yes I can. Would you please be so kind as to allow me the time to compose and type my answer to you?

Customer: replied 1 year ago.
sorry i am new to this site
Customer: replied 1 year ago.
FYI.. We decided to move back to Md. because I unexpectedly become pregnant at 38 and we had a 3 bedroom home with are 3 sons already living with us and didnt have the room and decided to move back and buy a bigger home
Expert:  LawTalk replied 1 year ago.

Hi,

The 1099C you received has nothing to do with the gain on your property---which is what the 1099 A was all about.

If the property foreclosed on was your primary residence, and the 1099 you receive is for the tax years 2007 through 2013, then you will not have to report the amount on the 1099 form as income for tax purposes. Because the 1099C was issued in 2014, the Mortgage Debt Relief Act does not apply. It ended in 2013. However, there may still be a way to avoid paying taxes on the 1099C income.

The 1099C is the loss suffered by the lender based on the sale of the property and they chose to finally write that debt off as uncollectible in 2014.

You should have received the 1099C by February and there clearly was an error by the lender in not sending it out in a timely manner.

You will need to immediately file an amended tax return for 2014 and include the 1099C as income earned for 2014.

If you were not insolvent in 2014---meaning that you had more assets then debts---including this debt represented by the 1099C, then you will have to pay taxes on the income represented by the 1099C.

If you can show that you were insolvent at the time of the write-off and 1099C ---that your debts, including the house, exceeded your assets, then the IRS will not force you to pay any taxes on the amount that the lender writes off.

If you were not fully insolvent at the time of the foreclosure---as an example you had $10,000 more in assets than in debts, then while the lender may 1099 you for $100,000, you would only have to pay taxes on the amount that you were above the insolvent level----you would pay income taxes on just $10,000.00.

The form you will need to include with your amended tax return to eliminate any obligation to pay taxes on the 1099C income is this form: http://www.irs.gov/pub/irs-pdf/f982.pdf

You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.

Please remember to rate my service to you so that I can be compensated for helping you. Thank you in advance.

I wish you and yours the best in 2015,

Doug

Customer: replied 1 year ago.
someone told to that congress extended the debt relief through 2014?
Expert:  LawTalk replied 1 year ago.

Good afternoon,

I wish I could tell you that a 2014 extension was approved by Congress, but it was not. Whoever told you that the Act was extended into 2014 was simply incorrect. In October 2008, due to the catastrophe in the housing market, the Act was extended through December 31, 2012. It was then extended once more by Congress through December 31, 2013. It was not however extended beyond 2013. I am sorry.

You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.

Kindly, remember to rate my service to you. That is how I am credited for assisting you.

I wish you and yours the best in 2015,

Doug

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