Hi I am considered a realestate Professional and passed all IRS rules in 2008 and 2009 when I was audited and have several homes and condo lets do the first one short sale it was purchase for 95k and sold for 35k it was rented for a few years i did get the 1099c
This was not my personal home but rental income for me I am Married
it was a purchase
The Foreclosure was built new in 2008 for about 360k i had a 339k mortgage it was also Income rental and it was new con truction that we built. the house was sold for 269k and the fmv was 289k wich was so very low I have an appraisal for the real estate company on paper for 373 a month after the sale for 373k it was a 2450 sg foot high end home for 140 per sguare foot plus 30k for the land that is cost basis not giveway price
This is for 2011 tax return I was was a victim of Identify theft that is what this return is now just being filled I was on extension for Oct 15 20012
On form 982 I want to make sure this is down correctly for line item 4
what about the foreclosure do we need to fill form for that
Hi Ok what about the short sale should I be using the execption for line 4
do i owe anyhing in taxes are do we quailfy for exception on both
Still confused we have two properties involded here it is the condo rental that was short saled and the house that you are saying for form 4797 on the foreclosue
can we talk about the short sale what do with this is this qualify for the exception for business use purchase build etc etc
i understand what to do with the forclosure how do I address the shortsale
is was a 1099 c for 56k the older account i am taking to says it will fall under the exception
is this correct how do we not pay taxes on this 56k
I am so sorry! I thought we were still talking about your rental condo! I am going to assume that you have lived in your home for more than two years as your principal residence.For your personal home, yes, Form 982 is used. The amount of debt canceled does go on Line 4 of the Form 982. It is also reported on Line 2 of this Form. For Line 3, the box should be checked "NO".. The amount from From 982 reduces the basis in your home. You have to report the sale of the home on Form 8949.You report the short sale proceeds on Form 8949, Column E. The basis for the Form 8949 is your cost (plus improvements), less the debt forgiven that you put on Form 982. This amount is reported in Column F if the Form 8949. If this results in a loss, you report put a POSITIVE amount in Column G of the Form 8949. This will zero out any loss that you have on the sale. If it is a gain, you put a NEGATIVE amount in Column G of the Form 8949 to zero out any gain (up to $250k for single, or $500k for married filing jointly). For both cases, in Column B of the Form 8949, you put a "H" as the code. This indicates that it is for the sale of your principal residence, which tells the IRS that there is no gain or loss on the sale, up to the Exclusion amounts (as I said, $250k for single, $500k for married).I hope that finally this is clear! I apologize for the confusion. I knew we were handling these one at a time, and thought we were still on the rental unit. If you have any further questions, please let me know. If this has helped, please rate me highly! I would appreciate it!Again, thanks and have a great weekend!
No this are business investment rentals
1) the house was built new and we rented in out it then Foreclosured you told me how to handle this correct ???
2) Then i told you in very beginning there was a short sale on a seperate rental property
we are dealing with 2 separate issuses
Now what happens on the short sale and the 1099 c that we have for 56k
My accounted says he will use form 982 and I am exemptions for business purchase etc I am a realestate professional
again non of this is my personal home
Canceled Debt that Qualifies for EXCLUSION from Gross Income:
do we qualify for number 4 on the condo short sale ?
“Qualified real property indebtedness” is, generally, debt that meets all of the following conditions: (i) it was incurred or assumed in connection with real property used in a trade or business; (ii) it is secured by real property; (iii) it was incurred or assumed after 1992, if the debt is either qualified acquisition indebtedness, defined below, or debt incurred to refinance real property business debt incurred or assumed before 1993, but only to the extent that the amount of such debt does not exceed the amount of debt being refinanced; and (iv) you elect to apply these rules by filing Form 982 with your federal income tax return.
“Qualified acquisition indebtedness” is either (i) debt incurred or assumed to acquire, construct reconstruct, or substantially improve real property that is used in a trade or business and secures the debt, or (ii) debt resulting from the refinancing of qualified acquisition indebtedness, to the extent that the amount of the debt does not exceed the amount of the debt being refinanced.
So, assuming that the debt was qualified acquisition indebtedness, and you are a real estate professional, so the debt is qualified real property indebtedness. You can exclude this from income by reducing the basis of the property by the amount of debt forgiven. You also report this amount on Line 4 of the Form 982.
If the property is subsequently sold (in your case through a short sale), you still report the sale of the property on Form 4797, using the short sale amount as the proceeds and the basis reduced by the amount of debt forgiven (the amount on the Form 982). The short sale then results in a gain or loss.
I hope this answers your issue! If not please feel free to ask away!
Ok you have been so nice and patient so can I take a huge loss on the short sale bought for 95k short sale for 39k
can i actually take the huge loss?
They for gave 56k that is what on the 1099 so how do numbers look now
you have been a pleasure to work with !
I will let people know that you are a good source
be happy to send nice testimonal
thanks so much God Bless you and your wife
were to we give you a nice testimonal
opps I forgot there should be no cancelation of dept on the foreclousure is that correct
I will just take the loss on 4797 this will help my tax burden on my overall taxes owed
thanks you help yesterday