Questions for Stephen G
Wondered if you would be kind enough to help me . I am in the process of completing escrow documents for the short sale of my primary residence in Las Vegas . The lender has issued an approval letter accepting the offer and has agreed to forgive the debt and issue a 1099C
I have received two docs from the escrow company CERTIFICATE FOR NO INFORMATION REPORTING ON THE SALE AND EXCHANGE OF PRINCIPLE RESIDENCE and a substitute form 1099S. I have to complete , sign and return only ONE of the TWO per instructions of the escrow company
In CERTIFICATE FOR NO INFORMATION REPORTING form I do not meet ONE of the assurances ie PART 11 assurance 3 which I would answer FALSE since I rented my property for NON PROFIT to a family friend for 2 years ( 1may 2011 to 30April 2013).
I however also owned and lived in my property for more than two years in a five year period to date of closing which will be end of August 2013or before . I purchased the property as my primary residence in April 2007 and lived in it from then till May 2011
September 1,2008 to 31August2009 ( I occupied property)
September1 2009 to 31 August2010 ( I occupied property)
September1,2010 to May2011 ( I occupied property)
For 2011 tax
year I filed my returns and reported the property mortgage interest paid and taxes paid under itemized deductions
. I did not claim any rental income or expenses because it was a RENTAL FOR NON PROFIT . For 2012 I did not file a return because I did not meet the income threshold , I was unemployed and had only incomes from 1099INT and 1099DIV
My question is does the assurance in PART 11 , No3 in the CERTIFICATE FOR NO INFORMATION REPORTING pertains to investment property rentals only or TO RENTALS FOR NON PROFIT AS WELL and should I complete the CERTIFICATE FOR NO INFORMATION REPORTING anyways ??
If I complete and send substitute form 1099S the fact that I rented my property for non profit will this now exclude me from qualifying for any tax exemptions under primary residence , debt relief act , capital gains and losses for a short sale ?? (property sale price $153K , balance owed on mortgage- indebtedness $219k,property purchase price April 2007 $275k , cash down payment $ 60000), deficiency waiver $66 K)