How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask WebCPA Your Own Question

WebCPA
WebCPA, Tax Accountant
Category: Tax
Satisfied Customers: 110
Experience:  Licensed CPA. 10+ years experience.
52706456
Type Your Tax Question Here...
WebCPA is online now
A new question is answered every 9 seconds

You just anwered a question on my short sale I do have a

Resolved Question:

You just anwered a question on my short sale I do have a question on a foreclousre now

the cost was 441,000
fair market value was 289,000 on 1099a
deprecation was 187,506
how do i get to my gain or lost for form 4797
Submitted: 1 year ago.
Category: Tax
Expert:  Lindie-mod replied 1 year ago.

Hello,

I'm Lindie, and I’m a moderator for this topic. I sent your requested professional a message to follow up with you here, when they are back online.

If I can help further, please let me know. Thank you for your continued patience.

Best,

Lindie

Customer: replied 1 year ago.

are you saying they are off line when will the answer get to me

Expert:  WebCPA replied 1 year ago.
Greetings,
What was in Box 2 (balance of principal outstanding) of Form 1099-A?
Thank you
Customer: replied 1 year ago.

box 2 i am looking now be back to you in 5 minutes this was a rental foreclosure in service over a year


 


can we also put this on form 982 ?

Expert:  WebCPA replied 1 year ago.
Thank you. Also please let me know if Box 5 of the 1099-A was checked and if you received a 1099-C related to this loan.
Customer: replied 1 year ago.

principal outstanding was 339k never got 1099c as of now

Customer: replied 1 year ago.

just waiting for your help no we only got a 1099a about box 5 what would be looking for i am going crazy trying to find the form

Customer: replied 1 year ago.

found it box five was check


 


box 4 says fair market 289.000


 


box 2 was outstanding balance 339,955.

Expert:  WebCPA replied 1 year ago.
Thanks. This is recourse debt. There is a $50,000 piece of the debt that appears to have not yet been forgiven due to the fact that you have not received a 1099-C for cancellation of debt. (FMV $289,000 - $339,955 = $50,000 unpaid loan balance). If this is forgiven it would be ordinary income in the year the debt is forgiven. Some or all of this could be excluded from income if you are insolvent per Form 982.

Report a gain on the transaction as follows:

Proceeds $289,000
Cost or other basis $441,000
Depreciation $187,506
Gain $35,506


Customer: replied 1 year ago.

ok since i dont have the 1099c for the 50k what needs to be done



and if we do get the 1099c in the future cant it go on form 982 for qualified real property like what we are doing on the short sale

Customer: replied 1 year ago.

on my short sale i took the full 56k on form 982 is that allowed by the guidline below publication 4681


 


its very confusing


 


limit.


The amount of canceled

qualified real property business debt you can

exclude from income is limited under this exclu-

sion to the excess (if any) of:

The outstanding principal amount of the

qualified real property business debt (im-

mediately before the cancellation), over

The FMV (immediately before the cancel-

lation) of the business real property secur-

ing the debt, reduced by the outstanding

principal amount of any other qualified real

property business debt secured by that

property (immediately before the cancella-

tion).

In addition to this limit, a second overall limit

applies. The amount of canceled qualified real

property business debt you can exclude from

income cannot be more than the total adjusted

bases of depreciable real property you held im-

mediately before the cancellation of the quali-

fied real property business indebtedness (other

than depreciable real property acquired in con-

templation of the cancellation). When figuring

this overall limit, use the adjusted basis of the

depreciable real property after any reductions in

basis required because of the exclusion of debt

canceled under the bankruptcy, insolvency, or

farm debt provisions describe

Expert:  WebCPA replied 1 year ago.
The $50,000 is not taxable unless the debt was actually discharged/forgiven. Even if the lender has not formally forgiven this, it may have been discharged due to contractual obligations or state law. You would need to ask a lawyer about whether the $50,000 has been discharged or if the lender can still file a judgment against you.

If the debt has been discharged, it is considered ordinary income and should be reported as such on Form 1040. Form 982 is generally used to reduce the taxable canceled debt related to your main home, or if certain other conditions are met. Other conditions include debt discharged in bankruptcy, or an insolvent taxpayer. For example, if you were insolvent at the time of the foreclosure, you would use Form 982.
Customer: replied 1 year ago.

OK i was talking about something else for get the foreclosure


 


we are back on the short sale see beggining i changed wanted to make sure we can take 56, on form 982


 



on my short sale i took the full 56k on form 982 is that allowed by the guidline below publication 4681




 




its very confusing




 




limit.




The amount of canceled



qualified real property business debt you can



exclude from income is limited under this exclu-



sion to the excess (if any) of:



The outstanding principal amount of the



qualified real property business debt (im-



mediately before the cancellation), over



The FMV (immediately before the cancel-



lation) of the business real property secur-



ing the debt, reduced by the outstanding



principal amount of any other qualified real



property business debt secured by that



property (immediately before the cancella-



tion).



In addition to this limit, a second overall limit



applies. The amount of canceled qualified real



property business debt you can exclude from



income cannot be more than the total adjusted



bases of depreciable real property you held im-



mediately before the cancellation of the quali-



fied real property business indebtedness (other



than depreciable real property acquired in con-



templation of the cancellation). When figuring



this overall limit, use the adjusted basis of the



depreciable real property after any reductions in



basis required because of the exclusion of debt



canceled under the bankruptcy, insolvency, or



farm debt provisions describe









Picture

Expert






so can I take all of the 56k on form 982

Expert:  WebCPA replied 1 year ago.
Yes, because you are also reducing the basis of the property by the full $56K.
WebCPA, Tax Accountant
Category: Tax
Satisfied Customers: 110
Experience: Licensed CPA. 10+ years experience.
WebCPA and 6 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.