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Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 1304
Experience:  MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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When you get a 1099 for a dee-in-lieu of foreclosure- What

Resolved Question:

When you get a 1099 for a dee-in-lieu of foreclosure- What does the IRS do? I know you have to file the 1099, and I know its based on what the mortgage company writes off as a difference in sale price and whats owed. How does the IRS nail you?
Submitted: 7 years ago.
Category: Tax
Expert:  Mark D replied 7 years ago.
Customer

 

Was this for a personal primary residence?

 

Regards,

 

Mark D

Customer: replied 7 years ago.
It is for a single family residence.
Expert:  Mark D replied 7 years ago.

Kirk,

 

Did you use this home as a primary residence?

 

Regards,

 

Mark D

Customer: replied 7 years ago.
Yes its primary
Expert:  Mark D replied 7 years ago.

Kirk,

 

The Mortgage Forgiveness Debt Relief Act allows up to $2 million of canceled debt to be excluded from taxable income resulting from the short-sale or foreclosure of a primary residence. You will claim the excluded COD income on Form 982 with your tax return. Please let me know if you have further questions.

 

Regards,

 

Mark D

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