Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.
Thank you for your question, and thanks for using JustAnswer.com. This is not a taxable transaction
, provided that the gain on the disposal of your home is not greater than $500,000. How you account for this is on Schedule D
you will report the gain, which is your original purchase price subtracted from the selling price. You sold the house effectively to the bank for your principal amount. When you calculate the gain, fill in "excluded under section 121." If there is a loss, it's not allowed, either.
Additional resources may be found, HERE
Either way, there's no taxable income
to you as a result of the 1099-A provided that the gain on the sale of your home is not greater than 500,000. Please let me know if you need anything additional. Thanks again for using JustAnswer.com and have a happy, and safe, 2013.
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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.