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tax-doctor, Tax Preparer
Category: Tax
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Experience:  Federal, State and local income tax preparation
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I short sold my house in May of 2012. The last payment I made

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I short sold my house in May of 2012. The last payment I made on the house was in September of 2011 so in 2012 I did not make any payments. I received a 1099-c form for $66000 in forgiven debt. I also received a 1098 form for 9200 in interest. Can I claim the interest from the 1098 on my 2012 taxes?
Hello, my name is XXXXX XXXXX I'm the tax-doctor.

Yes, provided both are for 2012. If interest pd 1099 is for 2011 then it gets included on your 2011 tax returns. If already filed you'd need to file amended 2011 returns.

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Customer: replied 3 years ago.

They are both for 2012. I did not, however, pay any interest directly in 2012 as I did not make any mortgage payments. Do I get to deduct the interest regardless because of the interest being forgiven on the 1099-C? If not for the current law that excludes that from being counted as part of taxable income I would have to pay taxes on it so indirectly I would have payed that interest... is that correct?

Yes, that's correct. The amount being forgiving includes interest, so therefore may be deducted.
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