All that really matters are two things; ... (1)Who's debt is it (who is liable (the way IRS will look at this, is whose name and SS# XXXXX XXXXX the 1099) and (2) was the forgiven debt secured by your primary residence?
TO step back a bit ... IRS has ALAWAYS said, Forgiven Debt is an increase in net wealth (therefore income) ... i.e., you got the money, hd the use of it, and then never paid it back ... therefor it is income
The Mortgage Debt forgiveness act of 2007 (extended for forgiven primary residence debt, through 2013), however says that any debt forgiveness ... (renegotiated loans, short sales, foreclosures, etc) ... as long as they are related to (secured by) you primary residence will not be taxable
So again ... the person who is liable for the debt is the PERSON, or persons) we're talking about and whether the debt being forgiven is primary residence debt are the ONLY two thngs it really turns on.
The rest of the tax situation, NOLs that might be there, etc are really not related.... the forgiven debt, that has ALWAYS been considered taxable income, is now waived. All other things remain the same.
I still don't see you coming into the chat session, so I'll move us to the "Q&A" mode. … Maybe that will help … (We can still continue a dialogue there, just not in real-time chat, as we can here)
Please let me know if you have any questions as all ...
for some reason the chat isn't coming up on my computer. I'll have my IT guy reset it.
I keep reading that the 1st and 2nd debt being secured by the house means something. Does that release me from forgiveness?
I have to find out if it's secured. I only know it's non-recourse.