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PDtax
PDtax, CPA firm owner
Category: Tax
Satisfied Customers: 1887
Experience:  32 years tax experience, including four years at a Big 4 firm.
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I already e-filed our joint tax return for 2011 last week.

Resolved Question:

I already e-filed our joint tax return for 2011 last week. Today I received 1099-C about a shortsale we did in 2010. We sold our hosue with closing date of 12/29/2010. I reported it on the worksheet for 2010 tax return. Called bank of America and they told me back then that they will not send us any paperwork. To a surprised I found two 1099-Cs in mail today. They state that the debt forgiveness date was 01/05/2011. Under the debt forgivness act, becuase it was our only and primary residence and the forgiven debt was 89,000 we do not have to report it on taxes, but we have to file a form 982. Can I just file an amendnemtn on Form 1040-X basicaly with our names and SSNs and then in section III explaining that we are attaching Form 982? Or is there anything else we need to do. ALso we received two 1099-C for the same amount. One under my name, one under my wife's name? Is that common, how is that reported on FOrm 982? We both owned the house we sold in short sale. Thank you!
Submitted: 2 years ago.
Category: Tax
Expert:  PDtax replied 2 years ago.

PDtax :

Hello from Just Answer.

PDtax :

Yes, the 982 for the forgiveness of the cancellation of debt income is needed. Just not right away.

Customer:

hello. Not right away?

PDtax :

You can file the paper 1040X, and explain the two 1099-C, one of which is ce3rtainly in error. I might propose that you wait to hear from them.

Customer:

from IRS or from BoA?

PDtax :

The reason is they are processing your e-filed return, and your refund would get hald up pending review of a paper 1040x. Even this early in filing season, this will add 4-6 weeks to processing.

Customer:

We already received our refunds.

Customer:

I have my 1040-X and 982 ready. With explanation. I am just not sure why we have two 1099-Cs and why the dates do not match.

Customer:

closing date 12/29/2010 and 1099-C with 01/05/2011

PDtax :

Then yes, I would file the 1040X paper, with 982, and include explanation for the two 1099-C and the date of transfer, and the dates on the 1099-C's.

Customer:

the amounts are exactly the same

Customer:

on from 928 should I just type the amount once

Customer:

do I need to do anything with BoA about those two 1099-Cs?

PDtax :

I would just enter it once, and use the narrative on page 2 of 1040x to explain the second one, issued in error.

Customer:

ok, that's what I already have.

PDtax :

THen, if I answered your question, please click Accept, and thank you.

Customer:

yes I will click accept in a second, I am not sure if you answered my question about contacting BoA?

Customer:

shoudl I bother with BoA or jsut explain to IRS?

PDtax :

I wouldn't. I think that's a complete waste of time. Just explain to IRS.

Customer:

prefect, my last question, the Form 1040X

Customer:

I leave everything blank, but section III correct?

Customer:

or course I will put names and SSN?

Customer:

or do I need to retype all the numbers again?

PDtax :

no, I'd put the income on page 1, and use the second column to report the income and reduction via form 982. That way, IRS will be able to match one of the 1099-C and look to your explanation on page 2.

Customer:

ok, thank you!

Customer:

have a good day.

PDtax, CPA firm owner
Category: Tax
Satisfied Customers: 1887
Experience: 32 years tax experience, including four years at a Big 4 firm.
PDtax and 7 other Tax Specialists are ready to help you

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